What are Articles of Incorporation?

If you’ve decided to establish your business as a corporation, you’ll need to fulfill your state’s requirements for registering your company. Among those requirements is filing an Articles of Incorporation (sometimes called Certificate of Incorporation) with the state government. Articles of Incorporation is a legal document containing important information about the company, and it must be approved by the Secretary of State office.

Why Articles of Incorporation are Important

Filing Articles of Incorporation registers the company as a?C Corporation ?with the state. It makes the business a separate legal and tax-paying entity from its owners, giving its incorporators and shareholders personal liability protection from the company’s legal and financial problems.

After receiving state approval of its articles of incorporation, a business is considered domiciled in that state (in other words, the state is the corporation’s home state). The company goes on record as a domestic corporation in the state, and the corporation must conduct business according to the laws and codes of that state.

Usually, people choose the state where they are located physically as their home state. However, some entrepreneurs choose a different state if they believe the business regulations and tax rules will benefit them. It’s wise to talk with an attorney and accountant (or tax advisor) for professional expertise when deciding what state to?incorporate ?in.

Note that in addition to the articles of incorporation, states may require a business to complete other formalities, too. For example, they may request a copy of the company bylaws (the governance document that a corporation uses to define rights and responsibilities of shareholders and its board of directors, when and where to hold annual meetings, and other details.)

Registered corporations that want to operate in states beyond their home state must go through a?foreign qualification ?process in those states.

Information Needed to File

Each state has an Articles of Incorporation (or?Certificate of Incorporation ) form available via the website of the state agency (usually the Secretary of State office) that handles business filings. Details requested in an Articles of Incorporation might include:

• Name of the corporation
• Address of the corporation’s office within the state of registration
• Name of the corporation’s registered agent and location
• Whether the corporation is organized on a stock or non-stock basis
• If organized on a stock basis, the initial classes of stock, number of authorized shares, and par values of shares
• Name and address of each incorporator
• Name and address of each member of the initial board of directors
• Effective date requested (Some states allow for a future effective date.)
• Purpose of the business
• Whether the corporation is a cooperative
• Whether the corporation is being formed as a benefit organization, and if so, what that public benefit is.
• Duration of the corporation (Often, incorporators intend for their corporation to exist perpetually, continuing indefinitely until formally dissolved. However, sometimes people form corporations for a distinct purpose and limited time.)
• Additional provisions
• Incorporators’ signatures

Because each state has its own form, the information required may differ from one state to the next.

How to File Your Documentation

Incorporators must file their company’s Articles of Incorporation with the appropriate state agency. Most states’ websites provide filing instructions. Usually, filing online provides a faster turnaround than submitting the paperwork by traditional mail.

Just as Articles of Incorporation forms vary from state to state, so do the fees for filing them. Some states charge a flat filing fee while others charge according to the number of authorized shares, and some have a fee structure with elements of both methods. I recommend visiting your state’s Secretary of State (or comparable agency’s) website to research the costs and other details.

Options for Filing Incorporation Documents

• Attorney?– Attorneys offer valuable expertise about the legal advantages and disadvantages of business entity type to help entrepreneurs decide whether operating as a corporation is ideal for their situation. They can also help prepare and file business documents. However, business owners are not required to use an attorney to complete and submit their Articles of Incorporation. Depending on the attorney’s fees, state registration fees, and the business’s budget, using a lawyer to handle the form may be cost-prohibitive.
• Do It Yourself?– Business owners may prepare and file their own Articles of Incorporation. One might assume this will stand as the most economical choice. However, if incorporators make errors on the form or file it incorrectly, the state might reject the filing. That can result in lost time and lost money because filing fees are not refundable.
• CorpNet?– An online document filing company, like CorpNet, can provide peace of mind that someone knowledgeable is handling your Articles of Incorporation. We have expertise in filing incorporation documents in all 50 states. Moreover, you will likely find our fees more affordable than those charged by attorneys.

The Best Time to File for Incorporation

A business will need its Articles of Incorporation approved before carrying out other key activities to operate the corporation legally. For example, it will need to have this document to apply for an?Employer Identification Number (EIN) , open a bank account, and apply for any required business licenses and permits. With all of that in mind, it’s generally beneficial to prepare and file the paperwork after the business owners have:

1. Decided to operate their company as a corporation
2. Conducted a?corporate name search ?and?trademark search ?to make sure that the name they want to use is available
3. Designated a?registered agent

What time of year is ideal for incorporating? While business owners can submit the paperwork at any time, there may be factors that make a specific month or date more attractive than others. For example, if incorporators want to launch the business as soon as possible, they’ll want to find out how long the state’s approval process may take. Most state websites give an estimation of the turnaround time. If entrepreneurs have formed their companies as a different entity type and want to switch it to a corporation, they might consider requesting an effective date of January 1 of the new year. The rationale is that it can provide a clean break from operating as one structure in the current year to operating as a corporation in the next year, thereby eliminating the need to file two sets of tax forms if switching entities in the middle of the year.

Making Changes and Amendments

If incorporators want to amend their business’s original Articles of Incorporation, they can do so by filing?Articles of Amendment . Some states call their form for recording changes to a corporation’s formation documents Restated Articles of Incorporation.

Put Your Trust in CorpNet’s Incorporation Filing Experts

Filing Articles of Incorporation is one of several steps involved in starting a corporation. Business owners should do plenty of research on their own about what their state requires and get guidance from legal and accounting professionals who can answer their questions and assist them in making informed decisions.

After you’ve done your homework and have decided to move forward with registering your corporation, CorpNet is here to help! Our filing experts will save you precious time and keep your costs manageable when preparing and filing your Articles of Incorporation.?Contact us today !