Building a successful business starts with a solid foundation. Writing clear and comprehensive articles of incorporation is vital when establishing a corporation. These documents define the corporate structure and empower board management capabilities, setting the stage for growth and success.
Effective board management is essential for corporate governance. The articles of incorporation define the board’s structure, decision-making processes, and powers. This structure determines how your company will be organized, including the roles and responsibilities of key stakeholders.
What are Articles of Incorporation?
What are articles of incorporation? Articles of incorporation are a set of formal documents filed with the Secretary of State. These documents typically include the firm’s name, the purpose of the corporation, and the process by which a board of directors is elected.
Articles of incorporation, corporate charter, or a certificate of incorporation, like an operating agreement for a limited liability company (LLC), are legally binding and establish the corporation as a separate legal entity from its shareholders.
Articles of incorporation play a key role in a corporation’s structure and functioning. Some of the benefits an organization can expect to experience due to these documents include:
- Legal recognition and entity status: Articles of incorporation grant the company legal recognition, enhancing its credibility and instilling confidence in potential investors, partners, and customers. This distinction separates the corporation’s liabilities from those of its owners or shareholders, providing limited liability protection.
- Corporate structure and governance: A corporate charter outlines the rules and procedures for decision-making, electing directors, conducting meetings, and voting. It establishes a clear framework for sound corporate governance, ensuring transparency and the protection of shareholders’ interests.
- Access to legal rights and privileges: Articles of incorporation enable an organization to have legal privileges, such as the ability to enter into contracts, sue or be sued, hold property, and issue stocks. This increases opportunities for growth, expansion, and intellectual property protection.
- Regulatory compliance and formality: By filing a certificate of incorporation, businesses fulfill the regulatory requirement imposed by the governing authorities. This helps build trust with stakeholders, protects the corporation’s legal standing, and minimizes the risk of legal disputes or challenges.
Articles of incorporation establish a corporation’s legal framework and legitimacy, including its subsidiary companies. They provide a solid foundation for managing the relationships and responsibilities between the parent company and its subsidiaries, enabling efficient coordination, resource allocation, and strategic decision-making.
Failure to draft articles of incorporation means the company may not receive legal recognition as a separate business entity, leaving its owners and shareholders personally liable for the corporation’s debts and legal obligations.
In addition, the absence of these documents can result in the loss of crucial legal rights, such as limited liability protection and access to certain tax benefits. The lack of a clear legal framework can lead to confusion and disputes, hindering the corporation’s growth, credibility, and long-term success.
How to Write Articles of Incorporation
Central to starting a business like an S corporation for the benefits of limited liability with pass-through taxation is drafting articles of incorporation, which legally establish the corporation and outline its structure.
This step-by-step guide will ensure compliance with legal requirements and set the stage for business success.
1. Visit the Secretary of State’s Website
The Secretary of State’s website offers valuable information, guidelines, and necessary forms for incorporating a business in your state. You can access details specific to your jurisdiction, such as filing requirements, fees, and any special provisions that may apply.
The website provides downloadable templates or sample forms for articles of incorporation. These resources provide a useful starting point when crafting your document. You can also find guidelines and instructions to ensure you meet all the necessary legal requirements.
2. Submit Business Information
Once familiar with the requirements outlined on the Secretary of State’s website, gather the necessary information for your articles of incorporation. Pay careful attention to accuracy and completeness, as this information will be the foundation for your company’s legal identity. The business information required will include:
- Unique and distinguishable name
- The official address of the corporation
- Registered agent for service of the process
- Brief description of the corporation’s purpose or activities
Ensure all the gathered information is accurate and up-to-date. Double-check the spelling, addresses, and other details before proceeding to the next step.
3. Submit Filing Check
Once you draft your articles of incorporation, it’s time to take care of the filing fees. The Secretary of State’s office requires filing fees to process and review your articles of incorporation. Visit the Secretary of State’s website or contact their office to determine the filing fees.
The fee amount varies depending on the jurisdiction and the type of corporation you are forming. Once you have obtained the required fee information, prepare a check payable to the Secretary of State. Some jurisdictions may accept online filings, while others require mailing the documents.
4. File Articles of Incorporation
Review the document thoroughly to avoid errors or omissions. Once completed, submit the articles of incorporation along with the filing fee to the Secretary of State’s office by mail or online, following their specific instructions.
After submitting the documents, you will receive a notification from the Secretary of State’s office. This confirmation proves that your articles of incorporation have been received and are being processed. Keep this document for your records.
What's Included in Articles of Incorporation?
The corporate charter contains essential information about the corporation, its structure, and purpose. While the specific requirements vary depending on the jurisdiction, the common elements included are:
- Business name, which must comply with the legal naming requirements of the jurisdiction
- Corporation’s purpose or the specific activities it intends to engage in
- Name and contact information of the registered agent who will act as the corporation’s official representative for receiving legal and administrative communications
- Corporation’s authorized capital and the division of shares among shareholders
- Outline of the structure and powers of the board of directors, including the number of directors, their qualifications, and the procedures for their appointment, removal, and terms of office
- Names and signatures of the individuals or entities who are responsible for incorporating the corporation
Consult the guidelines and templates provided by the Secretary of State, or seek legal advice to ensure compliance with the applicable laws and regulations in your state.
OnBoard Powers Effective Boards
Once your articles of incorporation are filed, it’s time to get to work. Managing board activities and ensuring efficient meetings can be complex, making OnBoard an indispensable platform. OnBoard is a powerful board management software solution that revolutionizes how directors, board chairs, and trustees communicate, make decisions, and conduct meetings.
The platform offers a collaborative digital board portal where board members can access meeting materials, annotate documents, and engage in discussions. It also helps improve board governance by facilitating compliance with legal and regulatory requirements.
Download our board meeting agenda template for first-hand experience of Onboard benefits.
About The Author
- Adam Wire is a Content Marketing Manager at OnBoard who joined the company in 2021. A Ball State University graduate, Adam worked in various content marketing roles at Angi, USA Football, and Adult & Child Health following a 12-year career in newspapers. His favorite part of the job is problem-solving and helping teammates achieve their goals. He lives in Indianapolis with his wife and two dogs. He’s an avid sports fan and foodie who also enjoys lawn and yard work and running.
- Board Management Software2023.09.13How to Write an Annual Board Report (Step-by-Step)
- Board Management Software2023.09.065 Best ESG Courses in Australia
- Board Management Software2023.09.05ESG Reporting in Australia: Overview and Requirements
- Board Management Software2023.08.225 Best Articles of Association Templates (Updated 2023)