Why are articles of incorporation important?

Men's shirt with a name tag that says hello I am forming an LLC

Looking to start your own small business? Congratulations, entrepreneur! While starting a business can be an exciting experience, it can also be overwhelming. Small business owners have a lot on their plates, including business planning and strategy, marketing, sales, staffing and customer service. Where do you even start? One of the most crucial first steps a new business owner should take is filing articles of incorporation.

What are articles of incorporation?

The first thing you should know is that the articles of incorporation are a legal document used to establish a corporation in the United States. When you file this form, you are informing your home state of your company’s existence and outlining the essential aspects of the business. The form must be filed with your state’s Secretary of State and renewed each year that you plan for your business to continue.

Why should business owners care?

Dealing with legal documents and paperwork may seem like a daunting task – but with the help of a small business lawyer, you will be grateful you filed your articles of incorporation for many reasons.

  • • As a legal corporation, you have the right to enter contracts, loan and borrow money, hire employees and make a profit.
  • • Your business will be more appealing to lenders because you are an established, legal corporation.
  • • You will have the ability to raise capital by selling stock.
  • • Filing this form allows you to separate yourself from your business and protect your personal assets from your company’s debts.
  • • An established, legal company avoids negative tax treatment that one would endure as a sole proprietor.

What is included in the articles of incorporation?

Articles of incorporation are often confused with a company’s bylaws, which provide a detailed guideline of your company’s governing rules and principles. Bylaws are not required to be public domain and can be private. The articles of incorporation, however, are public record, so you only need to include the basic necessary information.

  • • The name of the company
  • • The location of the company
  • • The number of authorized shares
  • • A determined duration of the business
  • • The names of directors
  • • The name of the registered agent

Do not stress about the legalities – let a professional get the job done. Contact small business attorney Dan Burke to schedule a free consultation to help with the important first steps for your new business.

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