Articles of Incorporation: Definition & Examples

Instructor: Elizabeth Branum
Articles of Incorporation are required for every incorporated entity; this includes C Corporations, S Corporations, and limited liability companies (LLCs). This lesson defines Articles of Incorporation, describes its filing requirement and provides a sample document.

Definition

The Articles of Incorporation is a company formation filing applicable to corporate entities. This document records the creation of the corporation, and no business can occur prior to its filing. It is required to be filed with the Secretary of State office of the appropriate state government. The filing fee varies by state, but generally starts around $50.

A corporation generally incorporates in the state in which it primarily conducts business, but it may choose to do so in another state. The corporation may be motivated to choose one state over another due to a state's required fees, taxes, or regulatory environment. The entity will pay taxes, however, wherever it conducts business, regardless of its state of incorporation. Once a business files its Articles of Incorporation, the document is available to the public.

Specific Elements

Specific requirements of the Articles of Incorporation vary by state, but all states generally require the corporate name, address, purpose, duration, authorized agent, and the number of authorized shares of stock to be included. The corporation's purpose is usually presented as a very broad statement. This allows the corporation to later extend its scope without amending the initial filing. The duration of the corporation may be specific or perpetual. The authorized agent accepts important documents, is readily available during normal business hours, and must have a physical address in the state. All for profit corporations authorize and issue stock; it represents ownership in a corporation. A corporation need not issue all the shares it authorizes. Some hold unissued shares so that it may add owners later. Some states calculate franchise tax based on the number of outstanding shares, so corporations should be mindful of the number of shares it issues.

Optional inclusions in the Articles of Incorporation generally relate to internal matters of the corporation. This includes items such as the restrictions on the transfer of shares, the rights of stockholders regarding the purchase of shares, and the corporation's rights to buy its own shares of stock. Bylaws may also be included; these list the provisions for management for the corporation's affairs as well as powers of the shareholders and directors.

Example

The following is a sample Articles of Incorporation:

ARTICLES OF INCORPORATION

for

APPLE ACCOUNTING, INC.

Article I - Name

The name of this Corporation is Apple Accounting, Inc.

Article II - Purpose

The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the laws of Delaware.

Article III - Duration

The corporation will have a perpetual existence, unless dissolved by the officers, directors or shareholders, or by operation of law.

Article IV - Principal Place of Business

The principal place of business and mailing address of the corporation will be the following: 123 Main Street, Dover, Delaware 99999.

Article V - Shares Authorized

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