In some states, articles of incorporation are called certificates of incorporation, charters, or articles of association. Whatever the name, this document creates your corporation and must meet your specific state law requirements. In most states, the secretary of state's office has sample articles of incorporation that you can use with instructions on how to complete and file the document. In some states, you can prepare and file your articles online and, in a few states, you must file online. Other states require that you mail or hand deliver a hard copy of your articles. Your choices on how you can submit your articles will depend on the state you are in.
Though details vary from state to state, the typical articles of incorporation include:
The purpose clause may seem confusing—it's as if you're being asked to define what your business will do until the end of time. Fortunately, this isn't necessary, because the statutes in many states allow you to use very general language, such as: "The purposes of this corporation shall be to engage in any lawful act or activity for which corporations may be organized under the business corporation law."
If such a statement is permitted in your state, it's usually best not to be any more specific. This leaves you free to change the nature of your business without amending the articles of incorporation. It also helps you avoid questions of whether you're acting beyond the scope of your stated purpose if you go into a new business.
Most states require you to designate somebody as a resident agent or registered agent in the articles of incorporation. This is the person who is authorized to receive official notices and lawsuit papers. Normally, you designate the corporate president as this person. If you change the person named or if there's a new address, you need to notify the secretary of state's office by filing a proper form.
It may take a few weeks for your articles of incorporation to be processed by the secretary of state's office. If you need quicker action, check to see if expedited handling is available. In some states, you can file your articles of incorporation in person and have the filing process completed within a day. Sometimes, articles of incorporation sent by UPS, Federal Express, or other overnight means are treated as in-person filings and given expedited treatment.
If you need to sign contracts, such as a lease, even before the corporation has been formed, it's a good idea to state in the contract that you're acting on behalf of a corporation to be formed and that the contract is subject to ratification by the board of directors of the new corporation. Then, if for some reason the corporation is never formed or if the directors fail to ratify the document, you're free from personal liability.
Here are sample articles of incorporation for a California corporation. Remember, the requirements for articles vary state to state so be sure to check your state law requirements for what to include in your articles.
ARTICLES OF INCORPORATION OF
ONE: The name of this corporation is ________________________________________
TWO: The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business, or the practice of a profession permitted to be incorporated by the California Corporation Code.
THREE: The name and address in this state of the corporation's
initial agent for the service of process is:
FOUR: This corporation is authorized to issue only one class of shares of stock which shall be designated common stock. The total number of shares it is authorized to issue is _______ shares.
FIVE: The names and addresses of the persons who are appointed to act as the initial directors of this corporation are:
SIX: The liability of the directors of the corporation for monetary damages shall be eliminated to the fullest extent permissible under California law.
SEVEN: The corporation is authorized to indemnify the directors and officers of the corporation to the fullest extent permissible under California law.
IN WITNESS WHEREOF, the undersigned, being all the persons named above as the initial directors, have executed these Articles of Incorporation.
Dated: ____________________ __________________________________________________
The undersigned, being all the persons named above as the initial directors, declare that they are the persons who executed the foregoing Articles of Incorporation, which execution is their act and deed.
Each state imposes a fee or a combination of fees for incorporating. Some states also require an initial tax payment. The total amounts vary widely, from $50 to $1,000. To find out your state's fees, check your state's corporate filing office website (usually a branch of the governor's office in your state capital). The official name of the office is typically the Corporations Division of the Secretary (or Department) of State. You can also call or email the office with questions.
Excerpted from Legal Guide for Starting & Running a Small Business, by Fred Steingold (Nolo).