An In-Depth Guide to a Company’s Articles of Incorporation

Starting a new small business can be daunting to new entrepreneurs. It involves several important tasks, including meeting legal requirements for business formation. This process can feel overwhelming and may make you anxious to open up shop.

The best way to tackle these responsibilities is to know which documents you must file and when to file them.

One of the key steps in incorporating a business is filing the articles of incorporation. Below, we outline everything you need to know about this essential document.

What are Articles of Incorporation?

Also known as the corporate charter, articles of association, or certificate of incorporation, the articles of incorporation are a set of documents that legally record the creation of a corporation. This legal document contains basic information about the corporation, including its name and address.

Business owners planning to run a new or existing company as a professional corporation, nonprofit corporation, or another type of corporation are legally required to file articles of organization.

What’s Included in the Articles of Organization?

While the articles of incorporation vary by state, most states request the following basic information:

• The name of the corporation or business
• The name and address of the corporation’s registered agent
• The type of corporate structure your business has (Your articles of incorporation can specify whether your company is a nonprofit corporation, nonstock corporation, or another type of corporation.)
• The names and addresses of the company’s board of directors
• The type of authorized shares of stock available to the company
  • Authorized shares are the maximum number of stocks given to shareholders. They may include common and preferred stock.
• The duration of the corporation or business, if it’s a temporarily operating entity
• The incorporator or business owner’s name, signature, and address

After a company’s business status is recognized, some business owners will modify their articles of incorporation. This is done with a restatement or restated articles of incorporation.

Why Are the Articles of Incorporation Important?

Articles of incorporation are crucial because they establish a company within its home state. Filing this document informs the state about your corporation’s purpose, your registered agent’s name and address, the shares and stock you have, and the names of any incorporators.

Articles of incorporation turn a business into a distinct legal entity and separate it from you and other owners. Incorporating your business reduces personal liability for potential debts and legal issues. The corporation, not the individual owners, becomes financially responsible for any obligations.

The benefits of writing and filing articles of incorporation also extend to stocks. Once your corporation is registered with the state, you can raise capital by selling stock to interested individuals. How you plan to sell company stocks for capital can be included in your business plan.

What’s the Difference Between Articles of Incorporation & Other Formation Documents?

Articles of incorporation can be confused with some of the other legal documents you’ll need to incorporate. Let’s look at how they’re different from operating agreements, articles of organization, and corporate bylaws.

Articles of Incorporation vs. Operating Agreement

Both of these business formation documents have several key differences, including the type of business they’re used for.

Corporations draft and file articles of incorporation when registering with their state, and limited liability companies (LLCs) write and follow operating agreements. One reduces personal liability with a less formal structure, while the other offers more formalized protection and specific tax benefits.

Purpose also distinguishes an LLC operating agreement from articles of incorporation. An operating agreement outlines the connections between each business owner, whereas the articles of incorporation legally form corporations.

Articles of Incorporation vs. Articles of Organization

Articles of organization and incorporation are similar filings. The difference between these legal documents lies in the business structure they create.

Articles of incorporation are designed for companies developing a corporation. Meanwhile, articles of organization are for LLCs.

Articles of Incorporation vs. Corporate Bylaws

Corporate bylaws outline the rules and regulations governing a corporation and the roles of the company’s directors and officers. These rules and the articles of incorporation create your corporation’s legal pillars.

Can Foreign Corporations File Articles of Incorporation?

Articles of incorporation don’t apply to foreign corporations. A foreign corporation operating in the United States must file a certificate of registration or its equivalent, depending on the state.

For example, Georgia requires foreign corporations to submit an original certificate of existence or good standing issued within 90 days. The document should come from the corporation’s home country. (If an out-of-state corporation will do business in the state, it must provide a certificate of existence or good standing from its home state.)

How Do I File Articles of Incorporation?

Before filing articles of incorporation, you must structure your business as a corporation. The documents you’ll need to incorporate vary by state, so it’s important to check with your Secretary of State to prevent delays.

Along with your articles of incorporation, your state may ask you to file the following documents.

• Business name reservation form – This document verifies and reserves your legal business name. Do a business name search or contact your state’s filing office to check whether your chosen name is available.
• Corporate by-laws that outline:

• • The rights and responsibilities of your company’s shareholders, officers, and directors
• • Other information about the corporation and its daily operations, such as the current fiscal year and the company’s contract approval process
• Minutes of the first meeting with details about your corporation’s first meeting, from appointed officers to other important duties done by the business
• Stock certificates for issued stocks and documentation

After gathering and preparing the required documents, you can submit them by mail or file them in person at your Secretary of State’s office. Most states also allow you to submit forms to the Secretary of State’s website. While filing fees vary by state, the cost is typically between $50 and $300.

Your Secretary of State will then review your submitted documents to ensure your business name is available and the information provided meets all of the state laws. If everything is approved, the state will file the required forms and make your business a legal corporation.

Take the Important Steps to Incorporation Today

If you’re opening a corporation, you must file articles of incorporation with your home state. It provides the state with essential information about your new business. Having articles of incorporation can help you minimize personal liability while granting you the power to issue and sell stocks.

Still have questions? Our Business Formation Experts are ready to assist you. Start your business with confidence, knowing that Inc Authority is here to answer all your questions and provide qualified guidance and support. Form your free LLC today!

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