What Is the Purpose of the Articles of Incorporation?

By Christopher Carter

The purpose of the articles of incorporation is to establish a corporate entity. Articles of incorporation may also be referred to as a certificate of formation or a corporate charter. A company's articles of incorporation is a legal document that provides basic information about a corporation. Articles of incorporation may be used in every state, as well as the District of Columbia, to establish a corporate entity.

Name

A corporation's articles of incorporation must contain the legal name of the entity. The legal name listed in the company's articles of incorporation must include the words "limited," "incorporated," "corporation," "company," or an appropriate abbreviation. The name of the corporate entity cannot be too similar to another business that is already registered in the state where the corporation intends to form.

Registered Agent

The name and address of the corporation's registered agent must be listed in the company's articles of incorporation. The registered agent is the adult or business that will accept legal and tax documents on behalf of the corporate entity. A registered agent must be at least 18 years of age and maintain a physical residence in the state where the articles of incorporation are filed. Businesses that act as a corporation's registered agent must be authorized to make transactions in the state where the articles of incorporation are filed. The registered agent must be available during normal business hours.

Considerations

The articles of incorporation will list the purpose for forming or organizing the corporation. A corporation's articles of incorporation may contain a general statement indicating the corporation is formed to conduct any "lawful" business activities. This type of broad language in the articles of incorporation allows a corporation to engage in a variety of legal activities. The names and addresses of each initial director may be required in the articles of incorporation, depending on the state of incorporation.

Incorporators

In states that do not require corporations to list the name and address of the company's initial directors in the articles of incorporation, the name and address of each incorporator must be listed instead. An incorporator may be a person or business that is responsible for filing the company's articles of incorporation with the secretary or department of state. The signature of each incorporator must be included in the articles of incorporation.

Stock

The number of shares a corporate entity has the authority to issue to potential shareholders must be listed in the company's articles of incorporation. The number of shares the company has the authority to issue may differ from the number of shares the company actually issues to investors. In addition, the par value of the company's stock must be listed in the articles of incorporation. The par value listed in the articles of incorporation represents the minimum value at which each share of company stock can be sold.

About the Author

Christopher Carter loves writing business, health and sports articles. He enjoys finding ways to communicate important information in a meaningful way to others. Carter earned his Bachelor of Science in accounting from Eastern Illinois University.