What is a Corporate Charter?
Also called 'articles of incorporation' or a 'certificate of incorporation,' a corporate charter is a legal document that sets forth a corporation's basic information, such as its location, profit/nonprofit status, board composition and ownership structure. A corporate charter is not the same as bylaws, which set forth the rules for the company's day-to-day operations.
Corporate Charter Example
Specifically, corporate charters typically include the following, though detailed requirements vary by state:
- The corporation's name and address
- The corporation's purpose
- Whether the corporation is a nonprofit or for-profit entity
- The name and address of the corporation's registered agent
- The number of shares authorized
- The classes and par values of these authorized shares
- The directors of the new corporation
The corporate charter must be filed with the secretary of state for the state in which the corporation is headquartered. In most cases, there is a fee to do this.
Although many state government websites offer basic templates for corporate charters, many people consult business attorneys when filing their corporate charters because some states offer more favorable business environments in which to incorporate.
Why Corporate Charters Matter
Corporate charters are important because they give birth to a new corporation by establishing the corporation's existence. This occurs once they are filed and approved by the secretary of state.
