What are articles of incorporation?

When you decided to start your business, one of the first things you're going to need to do is file your initial documents with your state. The Articles of Incorporation are normally one of those documents. They can have different names in different states, but normally it's a basic document that you file with the state to give the state notice that you're starting a company.

In addition to filing with the state, you're going to want to make sure to contact the IRS and get an EIN number, which has become a much easier process these days. You can just get it from the IRS website yourself (we used to have to go through accountants or your attorney to get these things done, but they've made it much easier).

What's in the Articles of Incorporation

You may be asking what kind of things have to be in my articles of incorporation? Check your local state, but some common items are,

  • What kind of business you're running ~ Is it going to be an LLC, a Corporation, a PLLC, a partnership?
  • Identify who the incorporator is ~ the incorporator does not have to be somebody who's in your business going forward. So for example, if you hire a third-party company to file your initial documents for you, they will normally be treated as the incorporator. They don't own the business. They don't have any right to the business. They don't affect your business going forward. But the state wants an incorporator listed on these documents.
  • Your company name ~ and you want to make sure that you've checked the company name against the other names in your state so that there's no confusion because if the name is too close to another name, they may reject your filing. It's also a good idea to go to the US Patent and Trademark Office and check for other companies in the country that are using the same or similar name. And you also want to make sure you can get a good domain name that's marketable and usable for you so that you can actually promote your business online. Even though you may find other businesses and other states in the country on the USPTO and might think that you don't have to worry about them, once you get online and you have websites, you may have confusion and you may find yourself being sued from somebody in another state.
  • Your company's address ~ where the company is located. It could be located in your house it can be in an office building, but the state wants to know where it is. And oftentimes they want it to be in the state where you're registered.
  • An agent ~ what happens if somebody wants to sue your company and they're not sure where you're located? What they can do is go to your Secretary of State and then what's listed as your registered agent with a name and an address. And that is who the Secretary of State will serve the loss of papers on. So that's why it's important to have the correct Registered Agent with the name and address in your articles of incorporation. And make sure it's somebody that will get the documents to you or make sure it's you know, it's your office or your registered agent because you don't want to miss lawsuit papers and end up with a default judgment against your business.
  • Some states will require you to list the purpose of your business ~ it can often just be to conduct basic business or it can be more specific.
  • Some states will also want you to have directors and officers listed and also the number of shares ~ these requirements differ from state to state. And if you're using an LLC, you're probably using that LLC for anonymity's sake, in which case the directors and shareholders you don't want them listed with the state. So you may be using a state like New Mexico so that you can have anonymous owners of the company when you form it.

Work With Professionals

Before you file for your company, though, you want to make sure you talk to your accountant or your attorney. And this discussion should be around what kind of form do you want to have? When I say form, we were just discussing the LLC and using it for anonymity. So an LLC is a corporate form, like a corporation or a partnership. You may also hear about S Corporations, which is a form of tax election for your business (an LLC can use an S corp election).

So there can be a variety of ways that you create your business and you want to make sure you've talked to the professionals, talk to your accountant, talk to your attorney and best case scenario, have the accountant talk to the attorney and they can discuss what's going to be best for you for your corporate form.

This may seem overwhelming to you, but attorneys and accountants deal with this all the time. So if you're ready to start a business and you want to get together your Articles of Organization, let's set up a legal strategy session. The Articles of Incorporation are extremely important for your business, but they don't have to be intimidating.

Andrew Ayers
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I work with business and estate planning clients to craft legal solutions to protect their legacies.