Archive for the ‘Business Incorporation Service’ Category

What is the code of ethics in the concept of business incorporation?

Business incorporation is the development of a new corporation serving as a business under the laws of the state and country. This corporation can be a non-profit organization, or a profitable organization. With the forming of a new business corporation, there remains associated the code of ethics that the corporation usually maintains to provide its best business services to its clients and customers. Business ethics are moral principles that are applied in the corporate and commercial world to provide guidelines to all employees of the organization for acceptable behavior throughout their policies and strategies.

Is the Corporation a Legal Entity?
The first code of ethics for the business organization is that whether the organization is a legal entity or not. Being the owner of a business corporation you are required to file the articles of incorporation declaring the address of your organization, the names of the vice presidents and the shareholders, the number of stocks the organization hold, and the name of the partners if any. The law usually considers an organization as a person who has a distinct personality and thus it demands morality from the corporation. Filing of articles of incorporation is the first step to give your organization a legal entity.

Employee, Employment and Business Ethics
Your organization being a small or a large publicly traded one requires that it follow the laws for fair terms of employment. Under the U.S. jurisdiction, an employment relationship is usually governed by the at-will principle. The fair judgment from the employer is generally expected by employees of the organization. The employer also holds authoritative powers to dismiss any employee without prior notice under an at-will doctrine. The violation of laws maintained by the organization also results in the termination of employment.
Each corporation has its own ethics policies. Corporations usually choose the course of highest integrity while maintaining the codes of ethics and moral principles. Every senior and junior employee of the organization is expected to deal fairly with each other and also maintain a good relationship with the corporation’s customers, competitors, suppliers and even other third parties. Employees who deal unscrupulously and profit at the cost of violations of the law are not tolerated by any corporation.

Business Ethics and the Government Rules
The corporation is solely responsible for maintaining government rules, laws and regulations as applicable to the business. Local customs and traditions are subject to change from place to place. So, it is important for a corporation to recognize this and conduct their workflow accordingly.

What exactly are the articles of incorporation?

The articles of incorporation or the certificate of incorporation also called the corporate charter is the basic deed of the corporation that embodies the primary rules that govern the management of a corporation. These articles are filed with the state or any other regulatory authority or agency. This is usually known by this name in the United States, whereas in the United Kingdom, these are known by the name of ‘articles of association.’
Each state bears its own system of authorization of articles. To begin the process of filing and getting approval of articles of incorporation the process begins with the office of the Secretary of State. The Articles of Incorporation give a company legal recognition as a corporation. Under some jurisdictions, an official certificate of incorporation together with a duplicate of the articles is issued to the claimant before the business is given legal status as a corporation.
Information provided by the articles of incorporation
The articles of incorporation of any legal organization bear the following information:
• The name of the corporation. This name has to be unique and must not match any other corporation or organization in that particular jurisdiction. Words like ‘incorporated’, ‘limited’, or ‘corporation’ are also associated with the name of the organization and is considered as a ‘flag’ to indicate that the organization maintains a limited liability and works as a corporation rather than an individual or partnership organization representing unlimited liability.
• The names of the board of members or persons who have organized the corporation are also endorsed in the articles of incorporation.
• It has to be declared in these articles as to whether the corporation is a ‘for-profit’, that is, a stock corporation or a non-stock corporation implying mostly the ‘not-for-profit’ organizations.
• It has to be mentioned whether the corporation is bearing a permanent existence or is operating for a limited period of time.
• It is also important to include the registered office address in the articles of incorporation. This is necessary in case legal papers need to be served to the corporation in hours of urgency.
• The name of the initial directors of the corporation must be endorsed in the document. In some cases, the registered agent or the incorporator serves as the director of the corporation.
• Sometimes, the articles of incorporation also contain the purpose for which the corporation has been built. Some jurisdictions also allow corporations to serve any lawful purpose under the state laws.

A glossary of terms in relation to articles of incorporation

Articles of Incorporation
Articles of incorporation are legal documents that are filed with the state laws under proper state authorities conveying the purpose of the corporation built. These articles contain the legal name of the organization, registered office address, names of the directors and board of members, and the amounts of stocks the corporation is authorized to own.

Assumed Name
It is a name under which the corporation conducts business. This is not the legal name of the corporation as has been filed in the articles of incorporation. Assumed name is filed at the county level in county recorder’s office.

Bylaws
Bylaws are rules of conduct that the corporation follows for its internal purposes. These laws are adopted at the initial meeting of the corporation and these are solely private documents that are not filed with any state legal authority.

Corporate Record Book
A corporate record book is an important part of a corporation to maintain limited liability to corporate shareholders. This book contains the articles of incorporation, bylaws, and the stock register.

Double Taxation
Corporate earnings are distributed as dividends to the shareholders and as a result, the corporation loses the adequate business expense deduction. To distribute earnings to shareholders as dividends, double tax on earnings at the corporate and shareholder level are imposed.

Equity
Equities are the ownership of a shareholder in the corporation.

Franchise Tax
To continue or perform business in a particular state, a fee is usually amended upon a corporation annually. This fee is called the franchise tax, the failure of which may result to forfeiture of the charter.

Incorporator
Incorporators are persons who sign and prepare the articles of incorporation. This work includes everything necessary for the incorporation of a corporation and also filing the required documents.

Minutes
These are written records of transactions that are authorized by the shareholders or the board of directors. Every corporation has a corporate minute book under which these records are put together.

Name Reservation
It is a process of reservation that allows a corporation or organization to obtain privileged use of a chosen corporate name for a limited period of time.

Operating Agreement
This is an agreement among members of a limited liability company which govern the operations and rights of the members of the respective LLC. It is parallel to corporate bylaws.

Quorum
In a corporation it is required to conduct a meeting under the presence of a minimum number of attendees. This is called a quorum.