Legal Definitions - Articles of Incorporation

Articles of Incorporation refer to the foundational legal document that officially creates a corporation with the state.

Think of it as the corporation's birth certificate and its initial rulebook. This document must be filed with the relevant government authority (usually the Secretary of State) to legally establish the company's existence. It outlines essential information about the corporation, such as its official name, its primary business purpose, the types and number of shares it is authorized to issue, and the initial framework for its governance, including how its board of directors will be elected. It is sometimes also called the corporate charter.

Once filed, the Articles of Incorporation serve as the highest governing document for the corporation, though it can be amended later if the company needs to make fundamental changes, provided these changes comply with the law and the document's own provisions.

• Example 1: Launching a New Software Company

  Imagine a group of entrepreneurs wanting to start "InnovateTech Solutions Inc." to develop cutting-edge mobile applications. To legally form their company as a corporation, they must draft and file their Articles of Incorporation with the state. This document would specify "InnovateTech Solutions Inc." as the corporate name, state its purpose as "developing and marketing innovative software applications," detail the initial number of common shares authorized for issuance to founders and investors, and outline the process for electing their first board of directors. Without this filing, InnovateTech Solutions Inc. would not legally exist as a corporation.

• Example 2: Establishing a Community Non-Profit

  A group of local volunteers decides to create a non-profit organization called "Bright Future Education Foundation" to provide free tutoring and educational resources to underprivileged students. Even though it's a non-profit, they still need to file Articles of Incorporation. Their document would clearly state the organization's name, its specific charitable purpose (e.g., "to promote literacy and provide educational support to underserved youth"), and the initial structure for its board of trustees. This foundational document is crucial for the organization to gain legal recognition as a non-profit corporation and eventually apply for tax-exempt status.

• Example 3: An Established Company Changing Its Capital Structure

  Consider "Global Manufacturing Corp.," a large, publicly traded company that initially authorized only common stock when it was founded decades ago. Now, to attract new institutional investors, the company decides to create and issue a new class of preferred shares with specific dividend rights. Since the authorized types and numbers of shares are fundamental details typically defined in the Articles of Incorporation, Global Manufacturing Corp. would need to formally amend its existing Articles of Incorporation and file these changes with the state. This demonstrates how the document can be updated to reflect significant structural changes within an established corporation.