One of the first steps to starting a corporation is to file articles of incorporation document with the state in which you plan to operate, usually with the office of the secretary of state or attorney general. Some states refer to this document as a certificate of incorporation. In the past, states such as Illinois used to send filers a document by the same name as proof of filing, but this is no longer the case. Although form names can differ, the information you must disclose on this document is usually uniform between states and includes such things as the company's name, address and purpose.
In some states, the articles of incorporation are referred to as the certificate of incorporation or statement of incorporation so they essentially are the same thing.
Why File Your Articles?
Your articles or certificate of incorporation declare your business as an official entity within your state and legally establish it, along with your business name. This is important for tax reasons, and to secure the name you intend to use during your daily operations. The document is less specific than a private business plan that details your plans for growth. The articles of incorporation document is only one or two pages and simply state that you intend to conduct business in a certain way, using a specific name, and then list contact information for your organization.
Choosing a Memorable Company Name
Choosing your company name is an important part of setting yourself apart from the competition. You need a name that is different from the names of other corporations operating in the state, and you probably want something that helps you stand out from the competition, too. You must also include an identifier as part of the name, such as incorporated, limited or LLC. Several states, such as Oklahoma, provide searchable databases online that you can use to verify whether a name you're interested in is already in use. Some states, such as Massachusetts and Texas, allow you to reserve a name for a fee.
Declaring Your Company's Purpose
Your statement of incorporation must describe the type of business your company will engage in. This can sometimes be a general statement, such as the often-used "any lawful act or activity for which corporations may be organized under the laws of (state)." The more general the information in the statement of incorporation, the less restricted you will be if your company decides to change the services it provides. Keep in mind that the articles of incorporation do not need to be as specific as your private business plan.
Business Contact Information
In some states, you must provide the address of the company's headquarters on the articles of incorporation document. This address may be different from where you will conduct business. You must provide the name of your registered agent and his address. This is the person authorized to receive legal documents on your company's behalf in the state if your company is sued.
You also must include the name and signature of the incorporator. This is the person who prepares and files the articles of incorporation for the company. Some states, such as Delaware, require you to also include the incorporator's address. Depending on the state, the names and addresses of your initial directors may be required.
State the Number of Shares
Your paperwork will require you to identify the total number of shares the corporation may issue, regardless of whether it plans to do so in the near future or at all. Shares represent ownership in the company. For example, if someone is issued 100 shares out of 100 shares available, he is the sole owner of the company. On the other hand, if he is issued 50 of those 100 shares, he owns 50 percent of the company. Some states also require listing the different classes of stock, whether common stock or preferred stock, and par value.