What Are an Articles of Incorporation?
While most would often think of successful companies as brainchildren of hard-working individuals, none of them would ever come into existence without accomplishing their needed paperwork. An article of incorporation declares the formation of business as a separate entity apart from its owners. This outlines the specifics of the company, namely its name, location, and organizational structure. This document is created and signed by its incorporators and submitted along with its operating agreement along with other forms.
How Do You Write an Articles of Incorporation?
Forming a company offers a lot of advantages to people seeking to elevate their businesses to another level. Doing so allows them to separate themselves from the liabilities that their business might incur from loans and debts, to name a few. All successful business giants allowed themselves to stay afloat because of it. And if you’re aspiring to upgrade your business into a full-fledged company, here’s how you can write articles of incorporation with these simple steps.
1. Provide Your Company’s Basic Information
An article of incorporation is a declaration of the formation of your company. It defines your company’s identity as a business, as well as its purpose. In writing your articles of incorporation, you should always begin by providing its necessary information, such as its name and the address of its principal place of business. You should also include the name and address of it’s authorized agent as well.
2. Specify the Purpose and Duration of your Company
Next, specify the purpose of the formation of your company. You can do this by setting whether your company will exist and operate as an LLC or not, as well as whether it has single or multiple members. You must also determine the duration of your company by stating whether its existence shall be perpetual or will dissolve at a specific time and condition.
3. Appoint the Company’s Initial Director
After providing the company’s necessary information, as well as specifying its purpose and duration, the next step to accomplish is to appoint the company’s initial director. Here, it would help if you appointed someone to preside and decide over the company matters until the company’s first annual meeting. You can do this by writing his or her name and address. And it allows your company to function correctly, even at its initial and formative stages.
4. Outline the Shareholders Rights and Privileges
Then, outline the rights and privileges of the company’s shareholders after completing the previous steps. This includes the shareholder’s right and privilege to cumulative voting rights, repeal, appeal, and amend by-laws, as well as the preemptive rights to acquire stocks and assets. Aside from that, it outlines the authorized stocks to issue, indemnification, and limitations of their liabilities.
5. Set the Company’s Fiscal Year
A fiscal year is described as the year set and determined for taxation and financial accounting purposes. It is also one of the most important elements in the formation and incorporation of a company, as well. So in writing your company’s articles of incorporation, don’t forget to set its fiscal year by providing the month and day of when the fiscal year begins as well as of when it will end. In the end, it will serve as your company’s financial calendar, where its finances are accounted for, and the distribution of dividends is determined.
6. Sign and Notarize the Articles of Incorporation
Lastly, sign your company’s articles of incorporation after declaring your company’s formation as a separate entity, specifying its purpose, outlining its shareholder’s rights and privileges, as well as setting its financial calendar. This signifies the authenticity and validity of the company’s existence. Notarize the document to verify its authenticity even further.
Frequently Asked Questions
Who can create articles of incorporation?
Articles of incorporation are created by individuals known as incorporators. These are business owners who wish to elevate their business from a general partnership. Incorporation is also done by individuals who wish to have their liabilities separate from their business, as well.
What are the other documents required for forming a company aside from the articles of incorporation?
Aside from the company’s articles of incorporation, a company must also create its own set of by-laws and operating agreement upon its formation. Aside from that, they also need to have several documents such as meeting minutes, non-disclosure agreements, employee agreements, among many others as well.
Are articles of incorporation applicable for forming LLCs or Limited Liability Companies?
LLCs or Limited Liability Companies are types of companies that enjoy the privilege of having separate liabilities while functioning like that of a general partnership. Because of that, business people identify them as companies, thus, requires articles of incorporation for their formation. Aside from that, LLCs are also required to have an operating agreement as well.
Are registered agents required when creating my company’s articles of incorporation?
Yes. Registered agents are required in every American state when organizing and forming a company. It means you’ll need to have a registered agent listed in your company’s articles, as well. You can, however, act as your registered agent if you’re registering your company as an LLC.
Do I need to notarize my company’s articles of incorporation?
Yes. Since articles of incorporation declares the formation of a legal entity, which means that its existence needs to be verified and acknowledged in the public record. Notarization also confirms the authenticity of the article’s statutes, as well as its incorporators.
Companies are considered as the final frontier of business, as it symbolizes a business’s growth and success. Many business tycoons form their companies through years of hard work, perseverance, and dedication. Finally, their company’s existence is also made possible by preparing its articles of incorporation with other documents.