What are Articles of Incorporation?

This is the piece of paper that gives birth to your business in the eyes of the law. Without filing Articles of Incorporation, your startup is just an idea or perhaps a sole proprietorship. It is the primary legal document filed with a state government to officially document the creation of a corporation.

When you file this document, you are separating yourself from the business. You are creating a separate legal entity that can own property, sue others, be sued, and issue stock. For a founder looking to build something that lasts, this is often the very first step in moving from concept to reality.

While the specific requirements vary slightly from state to state, the core components remain consistent. The document is usually surprisingly short. It does not contain your business plan or your operational strategy. It focuses on structural facts.

You will generally need to declare the following:

• Name: The legal name of the corporation, which usually must include a designator like Corp., Inc., or Ltd.
• Purpose: Most startups use a general clause stating the purpose is to engage in any lawful act or activity.
• Registered Agent: The person or service designated to receive legal papers on behalf of the company.
• Authorized Shares: The total number of shares the company is legally allowed to issue to founders, employees, and investors.
• Incorporator: The person or company preparing and filing the document.

A common point of confusion arises between the Articles of Incorporation and the Corporate Bylaws. It is vital to understand the difference early on.

The Articles of Incorporation are external. They are public record. Anyone can look them up on the Secretary of State website. They establish the existence of the entity.

Corporate Bylaws are internal. They are not filed with the state. They act as the operating manual for the business. Bylaws dictate how decisions are made, how board meetings are conducted, and the rights and powers of shareholders, directors, and officers.

Think of the Articles as the frame of the house and the Bylaws as the rules for the people living inside it.

For a small business staying local, filing in your home state is often sufficient. However, for a high-growth startup planning to raise venture capital, the contents of your Articles of Incorporation matter significantly.

Investors typically expect a specific structure. This often looks like a Delaware C-Corporation. The number of authorized shares matters here too. A standard starting point is often 10,000,000 authorized shares of Common Stock. This allows enough room to slice up equity for co-founders, early employees, and option pools without dealing with fractional shares immediately.

If you file with too few shares, you will have to pay legal fees and filing fees to amend the Articles later before you can bring on investors.

There is no single correct way to file, but there are standard paths. Founders should look at their specific situation and ask a few questions before submitting the paperwork.

Do we really need 10 million shares if it increases our franchise tax obligations in certain states? Is Delaware necessary right now, or will our home state suffice until a Series A round? Are we sure the name we want is actually available and not infringing on a trademark?

Business is about managing unknowns. Getting your Articles of Incorporation right eliminates one variable so you can focus on the product.