Articles of Incorporation are formal legal documents used for the creation and management of a corporation in the United States. These documents must be filed with the appropriate government agency (starting with the Secretary of State where the business is created) to document the legal existence of the business.
Articles of Incorporation must include detailed information about the corporation being formed. This includes the name of the business, its main address, the name and address of the corporation’s registered agent, and what type of corporation it will be. Other information may be required depending on the state where the business is legally formed. Since you do not have to incorporate in the state where you actually live, it’s important that you research the basic information that you’ll need for the state where you’d like to incorporate. This information is known as minimum filing requirements. You can almost always find that information on the Secretary of State website. You will put your documents on file with the Secretary of State and pay a filing fee. Each year that you wish for your corporation to continue, you’ll pay a renewal fee.
The answer to this question depends on the state where you plan to file the documents. Certain industries are not eligible to file Articles of Incorporation in certain states. So, make sure that you do your research on the state where you want to incorporate. For example, if you’re in the banking industry (including credit unions), insurance industry, savings and loans industry, railroad industry, waterworks industry, education industry, or utilities or other public services in the State of Florida, you would have to choose a different way to form your business.
Of course, most businesses don’t fall within those categories and would be eligible. However, make sure that you check before you pay any company to complete your Articles of Incorporation or before you take the time to do it yourself.
Using Articles of Incorporation means that you’ve made a conscious decision to create a legal business. This can help you separate yourself from your business. Separating yourself from your business can help protect your personal assets from business creditors or others who may decide to sue your business.
Filing Articles of Incorporation could mean that your business has the ability to raise capital through selling stock. Of course, before you elect to do this, make sure that you do your research and use the stock option that is best for you and your business. There may be additional paperwork required for you to issue stock.
Additionally, using Articles of Incorporation can create more confidence in your target market about your business. It can also make your business more attractive to lenders if you’re looking to grow in your industry. Also, as a business, you may, depending on the type of corporation you form, receive more favorable tax treatment than continuing on as a sole proprietor.
Corporations can perpetually exist. This means that, at least in theory, you could set up your business to last forever. When you fill out your Articles of Incorporation, you choose a timeframe for which the business will exist. You can use the term “perpetually” to keep the business in existence unless and until you complete and file the right documents to dissolve the company. You can also transfer ownership of the business.
If you don’t file Articles of Incorporation (or form a legal business entity of any sort), you’re considered a sole proprietor or a “doing business as.” You’re treated differently because you’re not separate from your business. You are the business. You could lose your personal assets (including your home) if your business is sued. You could also face negative tax treatment as sole proprietor.
The components of an Articles of Incorporation template may change depending on whether the document is state specific. Familiarize yourself with the following, but don’t be too surprised if you don’t see every component on the template for your state. If you want to ensure that your template has the right components, you can always check out the Secretary of State website to learn about what these documents need in the state where you want to incorporate. Attorney-drafted articles of incorporation are common because there are numerous components to these documents that vary based on the needs of the individual corporation.
The usual components are:
A registered agent may also be referred to as a resident agent or a statutory agent. This is someone who is located in the state where the business is incorporated. They must be available during regular business hours. This person will receive documents from the government or other official papers related to the business.
Different Types of Corporations
When you file your Articles of Incorporation, you must choose the the type of corporation that you’re forming. Keep in mind that while we list the three types of corporations below, you may be required to complete additional paperwork.
Forming a business can create risk. Choosing to incorporate may or may not be the best thing for you and your business. Certain forms of corporations will subject you to double taxation. It’s important that you carefully consider your own situation before choosing to incorporate. You may find it beneficial to seek legal advice before you incorporate.
Next, you should decide where the main place of business will be for your corporation. The full address must be listed on your Articles of Incorporation. You may not need to have your headquarters in the state where you’d like to incorporate.