Do I Need Articles of Incorporation?
Do I need Articles of Incorporation? You need an Articles of Incorporation to form an LLC or corporation with the state government.3 min read
2. Understanding Articles of Incorporation
3. Steps in Filing an Articles of Incorporation
Do I need Articles of Incorporation? You need an Articles of Incorporation to form an LLC or corporation with the state government, but sole proprietorships and partnerships are considered established as soon as the owners conduct business. Plus, each state has its own formation requirements.
What Are Articles of Incorporation?
Articles of Incorporation is a set of formal documents that legally create a corporation. These documents are filed with a government body and must contain important information such as:
- The business's name
- Owner contact details
- The company's street address
- Registered agent contact information
- Type of stock being issued
- Amount of stock being issued
Articles of Incorporation is also referred to as:
- Certificate of Incorporation
- Articles of Association
- Corporate Charter
Whether you're forming an S corporation or a C corporation, you need to file Articles of Incorporation with the state.
Understanding Articles of Incorporation
Many businesses in the United States are formed as corporations, but to be recognized as such, you'll need to take steps to officially establish your company. One of the key steps is filing an Articles of Incorporation.
Articles of Incorporation acts as a company charter and provides the state with the necessary information to formally establish the company. The document also acts as an outline for how the company is governed. You must file your Articles of Incorporation with the secretary of state's office in the state in which you're going to conduct business.
It's worth noting that certain states offer more favorable tax and regulatory environments than others, which attract more businesses. For instance, Nevada and Delaware attract a large portion of public corporations because they offer unbeatable tax advantages. These states also don't require shareholders, officers, or directors to be local residents, making it easy to form a company without residing in that particular location.
Although Articles of Incorporation requirements vary by state, it's important to include:
- The company's name
- The registered agent's name and address
- The type of corporate structure (i.e., nonprofit corporation, nonstock corporation, profit corporation, professional corporation, etc.)
- Contact information for the initial board of directors
- The type and number of authorized shares
- How long the corporation is expected to exist if it isn't meant to last forever
- The incorporator's name, address, and signature
You may also be required to include your company's purpose, although you can define this purpose broadly to maintain some level of flexibility. Other provisions you may need to include in the Articles of Incorporation are the director's liability limitations, stockholder actions, and stockholder authority for calling special meetings. You should also include the company's bylaws that outline how the business is run.
Remember, each state has different mandatory provisions you must include in the document, so check the secretary of state's website carefully when deciding what to include.
Most states charge filing fees when establishing a corporation, regardless of whether the business operates there. For example, if you start a business in one state but it is physically located in another, you must register and pay the filing fees in both states. This step also involves paying each state's taxes.
Depending on which state you file your Articles of Incorporation, expect to pay anywhere from $50 to $520. Massachusetts is the most expensive state to file, while Arkansas, Iowa, and Michigan are currently the cheapest.
Steps in Filing an Articles of Incorporation
The first step toward filing an Articles of Incorporation is to check your state's requirements. Your state may refer to this document as a Certificate of Formation or similar term.
Next, choose an appropriate business name with a corporate identifier. Search the secretary of state's business database to make sure your preferred name isn't already taken, then add a suitable identifier to the end (i.e., “Corporation,” “Company,” “Incorporated,” “Inc.,” etc.). It's important to note that the state holds the final say in whether your business name is approved.
After choosing your business name, decide on its principal place of business. This is the main location where you'll conduct business.
Write your business purpose, choose your registered agent, and you're ready to work on submitting your Articles of Incorporation.
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