What exactly are the articles of incorporation?
Posted on Tuesday 7 July 2009
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.
TAGS: Business Incorporation
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