Forming a corporation requires compliance with state laws and regulations. Incorporation formalities and regulations vary in each state. Refer to your state’s laws and regulations for forming a corporation. Basically all states require articles of incorporation to be filed with the state authority dealing with business registrations. In some states it is called a Certificate of Incorporation or Charter. The articles or certificate of incorporation must contain all the critical information regarding the promoters and purpose of the corporation. An article or certificate typically contain
- Name of the Corporation.
The proposed corporation’s name is the first article. The name must not be identical or closely resembling an existing business name in the state. You may have to consult multiple databases to ensure this. States maintain business registers of all registered names and trademarks. The name must include a term such as ‘Company’ or ‘Corporation’ or abbreviations suggested by the state laws.
- Registered Address.
The corporation must have a local address as it registered office or principal place of business
- Duration:
Some corporations may be formed for specific purpose and duration. Generally corporations are “perpetual”
- Business purpose.
The purpose for which the corporation is formed, the business it proposes to conduct. You may state that “all lawful business permitted by state law”. There are some restrictions on the types of business a corporation can engage in.
- Authorized Capital:
The number and class of shares the corporation is authorized to issue and the par value of a share should be stated.
- Registered agent:
The Corporation should have a registered agent with a local address for process serving and his consent to act as registered agent should be included.
- Name and Addresses of Incorporators.
- Name and Addresses of Directors
The above articles may not be in the same sequence in every state and some states may require more or less articles from the above. For example, Connecticut state certificate of incorporation require that the class of shares and it specifics like voting rights, transferability etc be stated. DC requires that the business articles be stated in detail. Publication of notice of intent to incorporate is part of some states incorporation requirement.
Limited Liability Companies or LLCs also provide personal liability protection to business owners. Forming LLC also requires legal and procedural formalities to be complied with. In an LLC, the charter to operate is in the form of Articles or Certificate of Organisation which will state the purpose and essential information about the promoters. Some states require a LLC operating agreement to be filed with the state.
