Business, Legal & Accounting Glossary
A document filed with state authorities (In the US, usually the Secretary of State or Corporations Commissioner, depending on the state) to form a corporation. As required by the general incorporation law of the state, the Articles normally include the purpose of the corporation, its principal place of business, the names of its initial directors who will control it, and the amounts and types of stock it is authorized to issue.
n. the basic charter of a corporation which spells out the name, basic purpose, incorporators, amount and types of stock which may be issued, and any special characteristics such as being non-profit. Each state has its own system of approval of articles, prohibits names which are confusingly similar to those of existing corporations (so an incorporator can test the name by applying to reserve the name), sets specific requirements for non-profits (charitable, religious, educational, public benefit, and so forth), and regulates the issuance of shares of stock. Articles must be signed by the incorporating person or persons or by the first board of directors. Major stock issuances require application to the Securities and Exchange Commission. The starting point for filing and approval of articles of incorporation is usually the state’s Secretary of State. There will be a fee and, often, a deposit of an estimated first year’s taxes.
A document, filed with a U.S. state by a corporation’s founders, describing the purpose, place of business, and other details of a corporation. also called a charter.
Articles of incorporation are a collection of documents filed with the appropriate government agency in order to legally establish a corporation. This document serves as the company’s fundamental charter, containing information such as the organization’s purpose, the shareholders’ rights and liabilities, the directors’ names and their roles within the organisation, and any other information required by law.
Articles of incorporation may be governed by state laws, so creators should adhere to regional laws regarding the name, purpose, and documents required. For instance, some states may prohibit the use of certain words in a business’s name if it is believed to be offensive to the sentiments of any particular religion or community, is confusing, or is too similar to an existing organisation.
The documents that must be filed will also vary according to what is required. A fee for incorporation and a deposit for the first year’s fee will be required, both of which must be paid at the time of incorporation. After verifying the information, the government entity responsible for incorporation issues a formal certificate of incorporation, at which point the business comes into existence.
If a business wishes to issue stock, it must follow a separate procedure supervised by the Securities and Exchange Commission (SEC).
Once all of these procedures are completed, the business can begin operations in earnest.
charter
corporate charter
authorized capital stock
Standard Operating Procedures
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This glossary post was last updated: 25th January, 2022 | 0 Views.