Corporate Governance
Articles of Incorporation
The founding document filed with the state to legally establish a corporation, defining its basic structure and purpose.
Overview
The founding document filed with the state to legally establish a corporation, defining its basic structure and purpose.
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Who Needs This Document?
Entrepreneurs incorporating a business, attorneys handling company formation, and business owners transitioning from sole proprietorship or partnership.
When Do You Need This?
Filed at the very beginning of forming a corporation. Required before the company can legally operate as a corporate entity.
Key Provisions
A well-drafted document should include the following essential provisions:
- Corporate name, registered agent, and principal office address
- Authorized shares, classes of stock, and par value
- Corporate purpose and powers statement
Frequently Asked Questions
- How do articles of incorporation differ from corporate bylaws?
- Articles of incorporation are the founding document that creates the corporation as a legal entity, typically filed with a government registry and containing basic facts like the company name and authorized shares. Bylaws are the internal operating rules adopted afterward, covering board procedures and officer roles, and they're generally easier to amend than the articles.
- What is the difference between authorized shares and issued shares?
- Authorized shares are the maximum number the corporation is permitted to issue under its articles, while issued shares are the portion actually distributed to shareholders. A company can authorize far more shares than it currently plans to issue, reserving room for future fundraising or equity grants without having to amend its articles every time it issues more stock.
- What happens if a company later needs to change its articles of incorporation?
- Changing the articles, such as increasing authorized shares or changing the company name, requires filing a formal amendment with the same registry where the original articles were filed, usually after board and shareholder approval. This is a more deliberate process than amending bylaws, since the articles are the public-facing founding record other parties rely on.
Related Documents
- Corporate BylawsThe internal rules governing a corporation's management, including board procedures, officer roles, and shareholder meeting protocols.
- Shareholder AgreementGoverns the relationship between shareholders of a corporation, protecting minority rights and establishing corporate governance rules.
- LLC Operating AgreementEstablishes the ownership structure, operating procedures, and member rights for a limited liability company.