If you’re starting a company, chances are you’ve given some thought to its structure. A corporation has a specific structure with associated tax and record-keeping obligations. Articles of incorporation are official public documents filed with the state where the business resides that declares its intention to maintain compliance with the tax and other reporting responsibilities of a corporation as required in that state.
Typically, articles of incorporation include:
There are several types of business structuresthat correspond with the size and liability assumed by the owners. These include:
When deciding whether to file as a corporation, an organization must weigh the costs and benefits of that type of structure: the owners are not personally liable for issues the corporation faces, and there are certain tax benefits as well. Corporations may have shareholders whose shares may be publicly or privately traded, a complex issue of taxation that likely requires more specialized employees and a larger administrative workforce.
According to the Small Business Administration, a government office, about 70 percent of American companies are sole proprietorships that do not require incorporation. Similarly, partnerships do not require incorporation. The SBA allows you to look up business registration requirements by the state on its website.
This corporation structure was created in 1958. A hybrid between traditional corporations and partnerships, it does not pay income taxes itself but passes profits to shareholders (a so-called “pass-through” corporation). It may have up to 100 shareholders and must meet other requirements enumerated in the law. Like a standard “C” corporation, an S Corporation requires registration with the state where the business is based.
Most businesses rely on experts to handle their paperwork, including accountants and attorneys who will ensure the filing paperwork is complete and all requirements have been met. However, it is entirely possible for an individual to file articles of incorporation. Standard templatesmay be downloaded but it’s always recommended that one checks with the state to make sure the free online templates match the state requirements for disclosure.
Bylaws are not public documentsfiled with articles of incorporation but they will tell you more about the company because these include information like the power and tenure (term length) of the board of directors, how shares are treated, what type of stock is used, information about board meetings, the frequency of audits, procedures for record keeping, rules for approving contracts and stock certificates, and procedures for the corporation’s annual meeting. The procedure for replacing board members will also be found here, a detail that can be crucial in corporate takeovers.
Every state has a different Articles of Incorporation form. Forms can be found on the state’s official website, which can be filled in online or printed out, completed and sent to the secretary of state’s office.
|New Hampshire||New Jersey||New Mexico||New York|
|North Carolina||North Dakota||Ohio||Oklahoma|
|Oregon||Pennsylvania||Rhode Island||South Carolina|