Articles of Incorporation
Candlefocus EditorThe articles of incorporation must outline the core elements of a corporation, including financial, legal and operational components. It must also include language outlining the management and operation of the corporation, who will assume key corporate responsibilities, financial reporting requirements and any loan requirements. In a sense, the articles of incorporation can be viewed as a “blueprint” that outlines the overall structure of the company.
In addition to providing a framework for the corporation, articles of incorporation also create a binding contract between the officers and directors of the company and the shareholders and creditors. All individuals involved within the company, including shareholders, directors, officers, and employees must abide by this contract to ensure that their own interests are properly safeguarded and that their rights and obligations are clearly defined.
The articles of incorporation may also outline the corporate roles and responsibilities of the incorporator and each of the directors and officers. They help define and clarify relationships between stakeholders, as well as the relationship between the company and the government. This helps ensure that the company’s goals, mission and overall operations align both with the shareholders and the laws and regulations of the state where it is incorporated.
Ultimately, the articles of incorporation protect both the company and its stakeholders. Proper execution of the document signals the company’s intent to be in compliance with all applicable laws, regulations, and resolutions. It also serves as a reminder to the shareholders and others that they must adhere to the rules and regulations of the corporation, as provided in the document.