Article of Incorporation Key Terms

Learn Article of Incorporation key terms for a better understanding of this topic

Articles of Incorporation, or Certificates of Incorporation, are written when a business desires legal corporate status in a particular state. Articles of Incorporation portray the basic information of the company, which includes the name of the business, the people (or board) who are responsible for drafting and upholding the articles of incorporation and the corporate purpose. Articles of incorporation are filed in each state where the company wants business ties. As you research information on articles of incorporation, you'll learn basic terms that will make the process more understandable.

Incorporate

To incorporate a company is to unite parts of the company to form one legal entity that has a specific purpose or goal. Articles of incorporation are an essential part of the process, as the articles present the name, the purpose and the bylaws of the corporation.

Corporate purpose

Corporate purpose, a fundamental portion of the articles of incorporation of a company, expresses the mission statement of the corporation. The corporate purpose explains the foundations of the company and what the company envisions for the future. Corporate purpose affects how the corporation is managed on every level in order to bring the corporate purpose to fruition, and conveys the responsibility of the company to deliver its proposed purpose to the community.

Stock corporation vs. nonstock corporation

A stock corporation is a for-profit corporation that sells shares of stock to the public. Stock-based companies must detail stocks in a section of the articles of incorporation called "authorized capital," where a breakdown of shares of common stock and preferred stock is presented. Nonstock corporations are generally non-profit organizations that have one corporate purpose or corporation that plan to exist for a short duration.

Articles of incorporation forms

Articles of incorporation forms are legal forms that a company can submit to the state in which the corporation exists. Articles of incorporation forms vary by state but contain the same basic information, such as the desired corporation name, the corporate purpose, the duration of the company and stock information, if applicable.

Business law attorney

A business law attorney is a professional who has extensive knowledge of corporate law and who can assist a company with articles of incorporation.

Filing and fees

The filing and fees associated with articles of incorporation vary by state. Most articles of incorporation forms are filed with the secretary of state in the state where the corporation exists or plans to conduct business. Fees vary based on state and on whether the corporation is a stock or nonstock company.

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