Articles of Incorporation

Definition - What does Articles of Incorporation mean?

Articles of incorporation are the legal documents that company personnel file with the concerned authorities when they wish to officially turn their company into a corporation. The concerned authority in this case is usually is the Division of Corporation or Secretary of State (depending on the state laws).

The requirements for articles of incorporation are different in each state.

Justipedia explains Articles of Incorporation

Articles of incorporation must detail specific information about the company and its governance. For example:

  • The name and address of the company
  • The company's purpose/function and its classification (non-profit or for-profit)
  • Information about its director(s), legal representatives, etc.
  • Financial information
  • Limitations on related business practices (if applicable)

Among listing the fundamental details of the corporation, articles of incorporation also describe the type of shares (stock) it is allowed to issue, how many shares of stock will be issued and to whom. The type of corporation that a company wishes to become will influence who can get stock. For example, if the company chooses to become a close corporation, shares of stock cannot be sold to the public, but only to people involved in or close to the business. Laying out stock ownership in the articles of incorporation prevents confusion over ownership later on down the road.

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