Articles of Incorporation

Profit Corporations (Business Corporations)

How to File Articles of Incorporation for a Profit Corporation

Many states offer separate forms for profit and nonprofit corporations. Obtain those that are indicated as articles of incorporation for a profit corporation. Articles of incorporation include the information listed below. Please note that certain information is noted as optional.

1. Name

   Corporate names must be distinguishable from all other registered entities in that state (including LLCs, LPs, and other corporations). Conduct a thorough name availability check before filing your articles of incorporation. Business names must include a corporate designator such as corporation, incorporated, or a similar abbreviation. Certain words cannot be used in corporate names without first obtaining government approval such as words referring to professional licensing (e.g. accounting).

2. Type of entity

   Corporations come in several structures and you will need to declare your chosen structure on your articles of incorporation. Business corporations are typically stock corporations, meaning they issue stock certificates and stockholders (shareholders) own the company. Corporations can also be non-stock corporations, meaning they do not issue stock and have members instead of shareholders. The members of non-stock corporations are entitled to vote in company matters, such as electing the board of directors. Some states offer several other classifications of corporations including statutory close, cooperative, management, professional, and insurance. A newer type of corporation called a Benefit Corporation (or B-Corporation) is also available in some states, which is a for-profit corporation dedicated to an altruistic mission.

3. Registered agent

   You are required to declare your registered agent on your articles of incorporation. A registered agent is the individual or company that will receive service of process (notice of a lawsuit) and other official legal or government documents for the business. Often, the address of the registered office is listed in the articles of incorporation. You may use any physical address located in your state of formation (not a PO Box). You can also hire a registered agent service, which is a company that serves on your behalf. If you have a home office, are regularly out of the office, or wish to have added privacy of keeping your address off the public record, then using a registered agent service may be in your interest. Many states charge a fee should you need to change your address or the name of your registered agent service, so do your research up front to avoid these change fees.

4. Incorporators

   Your corporation must have at least one incorporator but may have more. An incorporator is the individual responsible for executing the articles of incorporation. In most states, an incorporator may be any natural person of full age (18 years old) or a corporation. Many forms require that the name, address, and signature of each incorporator.

5. Shares

   You should include a statement about whether the entity is incorporated on a stock share or non-stock basis. If incorporated on a stock share basis, you must list the aggregate number of shares authorized. You do not have to issue all shares authorized, that way you have the flexibility to add more shareholders at a later date. In the example of a corporation with two owners, you may authorize 1,000 shares and issue 250 shares to each owner. The articles of incorporation can be amended to increase the maximum number of shares.

6. Shareholders

   A shareholder is an individual who owns shares (stock) in the corporation. Owning stock gives the shareholder the right to vote in company matters such as electing the board of directors, determining the amounts and classifications of shares, and authorizing mergers. Corporations must have at least one shareholder, but listing those individuals on the articles of incorporation is not required. In many states, shareholders can be individuals or other businesses. You may list the shareholders, the types of stock issued (such as common stock and preferred stock), and whether the board has the authority to change the types of shares.

7. Directors

   Directors are the individuals elected by the shareholders to oversee the management of the corporation. The Board of Directors elects corporate officers to run the day-to-day operations and make certain decisions for the corporation. Your corporation must have at least one director. Depending on your state, you may or may not be required to list directors in the articles of incorporation.

8. Officers

   Officers run the day-to-day operations of the corporation and typically include president, vice president, secretary, and treasurer. One person can hold more than one office. Depending on your state, you may or may not be required to list officers in the articles of incorporation.

9. Effective date & Duration

   By default the corporation will become effective on the date the Department of State files your articles of incorporation. You may list a future date if desired. Most businesses indicate “the corporation shall have perpetual existence”, but you can also indicate a specific dissolution date.

10. Other Provisions

    You may choose to include statements that provide more information about your company. Be aware that any information you include will become part of public record.

    • Articles of incorporation often include a statement that the corporation is incorporated under a particular state, even naming the specific statute or corporations code.
    • Additional provisions are often required for statutory close, management, cooperative, or other special types of corporations
    • You may choose to include statements that provide more information about your company such as the corporate purpose(s) or a par value for authorized shares.
    • Obtaining certain licenses, tax statuses, or other government classifications sometimes requires other provisions listed on your articles of incorporation.

Supplementary Documents a Profit Corporation May File with the Articles of Incorporation

Supplementary Forms

Some states require you to submit other forms with your articles of incorporation. It’s important to research the requirements in your state. For example, some states may require a docketing statement, separate signature/authorization, or other forms.

Necessary government approvals

It may be necessary for you to obtain approvals from other government agencies, such as licensing board if you wish to use a word or words that are regulated (e.g., engineering).

Consent to appropriation of name

Your corporation may need to obtain consent to use the business name from another business entity.

Professional corporation

A corporation that is formed to provide a specific professional service that requires a license, such as medicine or law, must elect to be a professional corporation (P.C.) and elect professional corporation status.

Special corporate structure

Consider if you want to elect to be a corporate subtype, such as a statutory close corporation.

How to Elect S-Corporation Status

S-Corporation is not a type of corporation as much as a tax election. By default, your corporation will receive tax treatment as a C-Corporation. Many small businesses elect S-Corporation tax treatment.

• Electing Subchapter S status helps shareholders avoid the double taxation that applies to traditional C-Corporations.
• S-Corps can also help the owners avoid paying the 15.3% Self-Employment Tax (Social Security and Medicare) on distributions.

Corporations must file form IRS-2553 within 75 calendar days of incorporation to be taxed as an S-Corp. Check with your state’s Department of Revenue if they will automatically recognize your federal IRS tax election or if you need to make an additional application or notification.

Nonprofit Corporations and Cooperatives

How to File Articles of Incorporation for a Nonprofit Corporation

You can form a nonprofit corporation or a nonprofit cooperative corporation by filing the articles of incorporation forms intended for a nonprofit. Nonprofit articles must contain the following information:

1. Name

   Corporate names must be distinguishable from all other registered entities in the state of formation. It is important that you conduct a thorough name availability check before filing your articles of incorporation. Certain words cannot be used in corporate names without first obtaining government approval such as words referencing professional licensing (e.g., accounting).

2. Type of entity

   You will specify whether you are incorporating a nonprofit corporation, nonprofit cooperative corporation, or other type of entity on your articles.

3. Registered office

   You are required to specify your registered office on your articles of incorporation. A registered office is where your organization receives service of process (notice of a lawsuit) or other important legal documents. You may use any physical address in your state of formation that is not a PO Box. You can also use a registered office provider, which is a company that serves on your behalf. If you have a home office, are regularly out of the office, or wish to have added privacy of keeping your address off the public record, then using a registered office service may be in your interest.

4. Incorporators

   Your corporation must have at least one incorporator but may have more. An incorporator is the individual responsible for executing the articles of incorporation. An incorporator may be any natural person of full age (18 years old) or a corporation. For any incorporator you list, you must include the incorporator’s name, address, and signature.

5. Stock or non-stock

   Nonprofits are organized on a non-stock basis, meaning no ownership shares are issued. In the event of dissolution, surplus monies are donated to another nonprofit. If the corporation is a nonprofit, you should include a statement that the corporation is organized on a non-stock basis.

   Nonprofit cooperatives may be organized on a stock or non-stock basis. Cooperatives that issue stock have shareholders. If the corporation is a cooperative, you should include a statement indicating whether it is organized on a stock or non-stock basis. Owning stock in a cooperative gives the shareholder/member the right to vote in company matters such as electing the board of directors.

6. Members

   A nonprofit may choose whether or not to have members. Members elect the board of directors and provide a layer of oversight that is important to many nonprofits, especially larger ones. Having members comes with added complexity in management, recordkeeping, and maintenance.

   You should indicate whether or not your nonprofit has members. If there are members, you should include a statement that the majority of the members of the committee authorized to incorporate the nonprofit have made the vote required to authorize the incorporation.

   A nonprofit cooperative that is organized on a stock share basis has shareholders. If it is not organized on a stock share basis, then it has members. A cooperative should indicate whether or not it is organized on a stock share basis and what common bond of membership exists among the members or shareholders.

7. Directors

   Directors are the individuals elected by the shareholders or members to oversee the management of the corporation. Nonprofits that do not have members typically have self-perpetuating boards, meaning the board of directors itself elects new directors to fill vacancies in the board. The board of directors elects corporate officers to run the day-to-day operations and make certain decisions for the corporation. Your corporation must have at least one director. Depending on your state, directors may or may not be required on the articles of incorporation.

8. Officers

   Officers run the day-to-day operations of the corporation and typically include a president, vice president, secretary, and treasurer. Depending on your state, officers may or may not be required on the articles of incorporation.

9. Effective date & Duration

   By default, your corporation will become effective on the date the Department of State processes your articles of incorporation. You may list a future date if desired. Most organizations indicate “the corporation shall have perpetual existence”, but you can also indicate a specific dissolution date.

10. Other provision

    A provision is additional information included in your articles of incorporation. Nonprofits in particular should take time to consider additional statements that should be included in the articles for 501(c)(3), state tax exemption, and other eligibility. Please be aware that any information you provide will become part of public record.

    • Your state may require a statement that the nonprofit is incorporated under the statutes or corporations code of the state.
    • Your state may also require a provision declaring for what purpose(s) the nonprofit is incorporated.
    • You often must also include a statement that the nonprofit does not contemplate pecuniary gain or profit.
    • If you are looking to become a 501(c)(3) tax exempt organization, you will need to include statements required by the IRS. These statements are to the effect of the following:
      • The corporation is not for profit
      • It will not engage in prohibited political or legislative activity listed in 501(c)(3)
      • If dissolved, it will distribute its assets in compliance with 501(c)(3)
    • Nonprofits that wish to apply for sales tax exemption in one or more states may also wish to research and include the statements required by these agencies. For example, you may need to include a statement prohibiting the use of surplus funds for private inurement to any person in the event of a sale or dissolution of the entity.
    • You may choose to include more information about your nonprofit.

Supplementary Documents Filed With Nonprofit Articles of Incorporation

Supplementary Forms

Some states require you to submit other forms with your articles of incorporation. It’s important to research the requirements in your state. For example, some states may require a docketing statement, separate signature/authorization, or other forms.

Necessary government approvals

It may be necessary for you to obtain approvals from other government agencies, such as licensing board if you wish to use a word or words that are regulated (e.g., engineering).

Consent to appropriation of name

Your corporation may need to obtain consent to use the business name from another business entity.

Special corporate structure

Consider if you want to elect to be a nonprofit corporate subtype, such as a cooperative corporation. Supplementary forms may be required.

How to Register for 501(c)(3), Fundraising, and State Tax Exemption

501(c)(3) Federal income tax exemption

Nonprofits may choose to apply for federal income tax exemption. 501(c)(3) recognition also allows donors to make tax deductible contributions The IRS published rev-557, an informational resource on how to obtain tax exempt status for a nonprofit organization. 501(c)(3) is perhaps the most common and well-known tax exemption category for charitable organizations, however the internal revenue code has exemption categories for many other types of nonprofits organizations. Incorporating the nonprofit and obtaining a Federal Tax ID (EIN) are precursors to applying for 501(c)(3) recognition.

State income and sales tax exemption

501(c)(3) recognition provides income tax exemption on federal taxes. Your state’s Department of Revenue may have additional applications or processes for obtaining state income tax exemption for the corporation. Nonprofits can apply to become exempt from paying sales tax and use tax.

State fundraising registration

Some aspects of fundraising are regulated by state government. Nonprofits that solicit funds may need to submit registrations with the Department of State or Revenue in each state where they solicit residents. Be sure to check the procedures for obtaining the authority to solicit, employee solicitors, or otherwise engage in fundraising in each state where you raise funds.

More filings may also be necessary depending on the specific situation of a nonprofit.

Publishing & Additional Requirements for Corporations

Understanding the Publishing Requirement for Articles of Incorporation

In some states, for-profit and nonprofit corporations are required to publish notice of their intention to or their filing of the articles of incorporation. Research and abide by the publication requirements in your state. Typically, specific language is required and there are guidelines about which legal publications or newspapers should be used. You should make sure to obtain legal affidavits providing proof of publishing from the newspapers and keep them in your corporate records. The cost of publishing is typically around $200 but varies by length of copy and newspaper.

Register for Federal Taxes, State Taxes, & Licenses/Permits

After you file your articles of incorporation, it will take the state approximately 2-4 weeks to send back your filed articles. In addition to filing the articles, you will apply for a Federal Tax ID (EIN), a unique nine-digit number assigned by the IRS to identify your business. You should consult your tax professional to determine your state tax registration requirements. Many businesses register for sales tax or employer taxes. You may also need to get local licenses or permits.

Hold an Organization Meeting & Establish Records

Once the registration process is complete, you should hold an organizational meeting of the incorporators and take minutes of that meeting. At that time, you will ratify corporate bylaws, adopt a shareholders agreement, issue stock certificates and complete a stock ledger, elect directors and officers, and anything else you may want to include.

Ongoing Compliance Requirements

Ongoing requirements include annual meetings with minutes, special meetings to make important business decisions, maintaining a registered office, amending your articles of incorporation as needed, and more. For more information on business compliance action items, please consult your Harbor Compliance representative.