One essential step in forming a corporation is to create articles of incorporation. To generate this legally required document, it is common to use a template. It's vital to understand the importance of this document and how to use a template to create one for your business.
In order to legally create a corporation, all states require that you file a document setting forth basic information about the business. This document is usually called articles of incorporation, although in some states it is called a certificate of incorporation or certificate of formation.
The articles of incorporation must contain the information required by the corporation laws of the state where the business will be incorporated. These requirements may be obtained from the state agency that regulates corporations — the name of which varies from state to state. In many states it is the Secretary of State but in others it may have another title, such as Corporations Division, Department of Commerce or Corporation Commission.
Articles of incorporation are only used for companies structured as corporations. If you've decided to structure your business as a limited liability company (LLC), use a template for articles of organization instead.
Obtaining a Template
Your state's agency may have an articles of incorporation template, which may be available from its website, local office or by mail. By using the official template, you will be confident your articles comply with your state's laws. The agency's website may even allow you to fill out the template and file it online.
Templates are also available from numerous other online sources and sometimes from local office-supply stores. Templates can also be found in books available online, in local bookstores or at your local library. Just be sure that the articles of incorporation form satisfies your state's requirements. Even if the particular template indicates it is for your state, you should still check to be sure.
Articles of Incorporation Content
As noted above, the exact requirements for articles of incorporation are specified by state law. However, it is common for articles of incorporation to include the following:
- Name of the corporation. This requires some advance research to determine whether the name you wish to use is available.
- Purpose of the corporation. In most states, you can list a general purpose so you won't be limited if the business expands. For example, it is common for the purpose to be stated as “any lawful act or activity for which a corporation may be organized."
- Corporation's main office address
- Duration of the corporation. In most cases the corporation will be designated as existing perpetually, but in some cases a corporation is formed for a limited amount of time in order to complete a specific project.
- Number and types of shares of stock that the corporation is authorized to issue. Authorizing too few shares will require a vote of shareholders in the future if it is determined that more shares are needed to raise additional funds. On the other hand, authorizing too many may result in higher filing fees and taxes.
- Name and business address of the registered agent of the corporation
- The name, address and signature of one or more incorporators. This is generally the person who files the articles of incorporation. An incorporator may, but need not, be an officer, director or shareholder of the company. If an attorney is hired to prepare and file the articles, the attorney is often the incorporator.
Some states also require the articles to list the names and addresses of the initial board of directors. You may also need a special type of template if you are forming a nonprofit corporation.
Before filing articles of incorporation, be sure that the document is accurate. If you make a mistake, it can cost additional fees to file amended or restated articles of incorporation.
If one or more of the following apply, you may want to consider consulting a lawyer or tax professional to prepare your articles or review the ones you've prepared from a template:
- You think you need to state a detailed purpose for the corporation.
- You will be issuing various types of shares of stock or authorizing a large number of shares.
- If, for any reason, you just don't feel comfortable preparing your own articles from a template.
In most cases, using an articles of incorporation template will work just fine and save you the cost of attorney fees.