What are the articles of incorporation and do you need them?
When you are a new business owner, there are many things to learn, including the legal aspects required to maintain the company. Corporate structure can bring significant benefits, such as limited liability. However, if you do not comply with state laws, you may lose these benefits.
Although not required in some states, the Articles of Association is usually a good idea. They provide basic ground rules for your business and help executives stay on the same page. Here, Rocket Lawyer shares the articles of incorporation you need to know.
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What is the Articles of Association?
The articles of incorporation provide internal rules for your business. The “Articles of Association” laid the basic elements for the establishment of the company, and the Articles of Association are more detailed. They have formulated guiding principles and are specifically aimed at the day-to-day operations of the company.
The articles of association are usually drafted and approved by the company’s board of directors. For many small businesses, this means that you and your partner may write a charter with the help of a lawyer.
Does my business need articles of incorporation?
Not every business needs a company charter. Some states do not require you to have these documents, nor do you need to submit them to the Secretary of State or other official agencies. For example, Alaska, Louisiana, Minnesota, and Utah do not need to create articles of incorporation, but California and New York laws require the creation of articles of incorporation and keep a copy at the company’s principal place of business.
Even if the articles of incorporation are not required, it is still a good idea. The charter provides basic information about business functions and operations. Solving sensitive issues at the beginning of the company’s development can help prevent conflicts between owners.
What is included in the articles of incorporation?
The charter can be broad or specific according to your needs. The following are some of the most common terms and topics covered in the company’s articles of incorporation.
Name, purpose and office location
The articles of association will stipulate the location of the company and its name. The charter may also include an overall purpose or mission statement. The mission statement will not only clarify the purpose of the company, but also clarify its values.
Membership and membership terms
The charter usually lists the specific names of the members. In addition, it will clarify terms that directly affect membership. Some of the most common examples include:
- How to choose members
- Whether and how to delete members
- Disciplinary procedures for members
- Type of membership
- Member voting rights
Some companies have no members. You can also make a brief description in the articles of association.
The board of directors is the management body of the company. They do not provide daily operations, but provide high-level supervision and guidance. Generally, a company must have a board of directors.
The part of the board of directors in the company’s articles of association usually involves:
- Number of directors
- How to select directors
- Eligibility to be a member of the board of directors
- Term of appointment as a member of the board of directors
- Board of Directors Responsibilities
Requirements for holding a meeting
The charter should also clearly state how and when the meeting will be held. The charter should also involve the process of setting up annual meetings, regular meetings and special meetings.
Amend the constitution
You should also clarify how to change the bylaws in the future. Although the charter may look complete on the first draft, it may eventually need to be updated or changed. Your charter should outline the process for making these changes. Generally, it is a good idea to amend the bylaws at least once every five years.
Procedures for keeping company records
Your company must keep certain records, such as meeting minutes and articles of incorporation. The bylaws may cover how to prepare and keep these records to help ensure that your company maintains compliance with state laws. The charter can also address the issue of how members can access and inspect records.
Do I need a lawyer to write my articles of incorporation?
You do not need to hire a lawyer to write your articles, but it may be a good idea to have professionals to help you.Each company has a different charter, and each state has its own unique requirements for the content contained in it company documents.
Rocket Lawyer provides forms that you can use to fill out Formulate a charter On your own.If you want to consult with a lawyer about legal matters specific to your company and documents that need to comply with state laws, please contact Rocket Lawyer on call® lawyer Affordable legal advice.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm, nor is it a lawyer or a substitute for a law firm. The law is complex and changes frequently.Seek legal advice Ask a lawyer.