What Are Organizational Documents for Corporation?
A business's organizational documents typically include formation or registration paperwork and operational documents that control a business's activities.3 min read
2. Provisions in an Articles of Incorporation
Updated Ocotber 12,2020:
The organizational documents for corporation include the following:
- Articles of Incorporation
- Corporate bylaws
- Shareholder agreement
An Overview of a Corporation's Organizational Documents
A business's organizational documents typically include formation or registration paperwork and operational documents that control a business's activities. The types of organizational documents you use depend on the type of entity you run and the jurisdiction you're in.
Collectively, formation or organizational documents are filed with a relevant state agency. Internal documents govern management, operations, and equity holders' rights. Corporations use a Certificate of Incorporation — also known as an Articles of Incorporation — and bylaws.
Whether you file a general, benefit, close, or non-profit corporation, you'll file a Certificate of Incorporation (or equivalent document) and bylaws. You may or may not have to file a shareholder agreement. The incorporation document is the corporation's basic charter. The purpose of the bylaws is to outline operating procedures.
At a minimum, bylaws cover the following:
- Corporation name, address, and principal location
- Terms of service
- Identity of directors and officers
- Election procedures
- Stock that the corporation is authorized to issue
- Procedures for shareholder and director meetings
- Director, executive, and shareholder actions
- Amendment procedures
In the shareholder agreement, the owners — or shareholders — layout provisions relating to their ownership interest in the corporation. Agreements are consensual and typically serve a particular purpose or settle issues. In general, shareholder agreements aren't filed publicly.
Your corporation's purpose will determine what your shareholder agreement contains, but common provisions include the following:
- Who's allowed to be a shareholder
- Who's allowed to serve on the board of directors
- Shareholder rights and obligations
- Procedures if shareholders leave or die
- Company management and operations
- Shareholder regulations
- Stock valuation for internal purposes
- Procedure for the repurchase of shares
Provisions in an Articles of Incorporation
Following are provisions in an Articles of Incorporation.
You'll list your corporate name, which usually must have some type of corporate identifier on it, such as the following:
- Abbreviations of the above
Include a business purpose, which explains what your company does or provides. You'll use one of two business purpose clauses:
- General: Some states are fine with a general-purpose clause, meaning that the corporation engages in “all lawful business.”
- Specific: Other states expect a more thorough explanation of the types of products and/or services a corporation provides.
Almost all states require your corporation to have a registered agent, also known as a statutory agent, agent for service or process, or resident agent. This is a person or company that accepts legal and tax documents on behalf of the corporation. All agents must have a physical street address in the state and be available during business hours.
Incorporators are the people responsible for filing formation documents for a corporation. Include their names and addresses. Incorporators must also sign the Articles.
Depending on the state, you'll name your corporation's initial directors and list their addresses. Directors are the individuals who oversee a corporation's business affairs, and they're responsible for major corporate decisions. Shareholders elect directors, and directors appoint corporate officers.
Officers include a treasurer, secretary, vice president, and president of a corporation. They're responsible for day-to-day business activities. Some states don't require officer information, but others do. The same goes for providing the corporation's legal address. Not all states require you to list this information in your Articles, but some do.
Outline the number of authorized shares your corporation will issue. No matter the size of the corporation, all have stock because that's what represents ownership in the company. If a corporation has plans to authorize both preferred and common shares of stock, this information has to be included in the Articles of Incorporation, along with information pertaining to voting rights.
Typically, preferred shares give shareholders preferential distribution of assets or dividend payments, in the event the corporation ends operations. A lot of small business owners only authorize common stock shares.
There are various organizational documents you need to form a corporation. Because starting this business type is complicated, you may want to consult with legal and tax professionals to ensure you meet all guidelines and submit all of the necessary paperwork.
If you need help with the organizational documents for a corporation, you can post your legal need on Upcounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.