Definition:
Articles of incorporation are a legal document that outlines the structure and purpose of a corporation. It serves as the charter for the corporation, defining its name, purpose, authorized shares of stock, and other key details.
Key components of articles of incorporation:
- Name: The name of the corporation.
- Purpose: The stated purpose of the corporation.
- Capital structure: The authorized number of shares of stock, their par value, and the types of stock (common and preferred).
- Directors and officers: The names and addresses of the initial directors and officers of the corporation.
- Registered agent: The name and address of the registered agent, who is responsible for receiving legal notices on behalf of the corporation.
- Duration: The duration of the corporation, which can be perpetual or for a specific period of time.
Why are articles of incorporation important?
- Legal existence: The articles of incorporation establish the corporation as a legal entity.
- Corporate governance: They outline the structure and governance of the corporation.
- Investor protection: The articles of incorporation provide information to investors about the corporation’s structure and purpose.
- Regulatory compliance: The articles of incorporation must comply with applicable laws and regulations.
In essence, the articles of incorporation are a fundamental document for a corporation, providing the legal framework for its existence and operations.
