What are Articles of Incorporation?

Articles of incorporation provide the framework that a company operates within. Similar to a country having a Constitution, companies adopt Articles of incorporation outlining the nature of a company's business and organisation, its trading name, and date of formation. This document is necessary when incorporating your business. Business incorporation results in your company having its own separate legal existence. That is, through Incorporation a business becomes an entity separate from its managers and owners.

Can I Use any Company Name?

By listing the nature of the company in the Articles of Incorporation, consumers, regulators and shareholders are aware what the purpose of the company is. It is important that the company name is unique to other names registered with the relevant regulatory body. This ensures that consumers are not confused or mislead as to what the nature of the company is. Furthermore, in Australia there are also certain words that you cannot use in your business name without special approval. Some examples of these words are 'university', 'trust', and 'Royal Family'. The regulatory body, ASIC, may also refuse to register company names that could offend or indicate illegal business. Most importantly, by ensuring your company name is unique and original it avoids any potential litigation concerning trademark infringement. You can check the National Names Index online at the ASIC website to make sure your new company name is not the same as any other.

In the Articles of incorporation the full name of the company must be used. That is the regular name of the company plus a legally identifiable ending. A legal ending indicates the status of the corporation, that is 'Inc' for incorporated, 'Ltd' for limited liability, and 'Corp' which distinguishes it from partnerships and sole traders. For example, the regular name of the company may be "Delicious Donuts". Imagine that the directors have undertaken the Incorporation process and registered it as an organisation with limited liability. In the Articles of incorporation it would appear as "Delicious Donuts Inc Ltd".

What Else Should be Included in the Articles of Incorporation?

Additionally, Articles of incorporation may also detail the people operating the company, such as the board of directors, and the location of the head office or registered officer. These latter details are necessary for people wishing to serve legal documents on the company. Furthermore, if your company is going to issue shares or stock the Articles of incorporation may also list the number of shares that can be issued. This should include a description of the classes of shares and the values of each type of share, such as how many votes are assigned to each class of share.

How Should the Articles of Incorporation be Structured?

There are many examples available on the internet of how Articles of incorporation can look. Overall, they have a very straightforward structure, and use basic and direct language. Although they may sound like an intimidating legal document they are actually easy to read and could be written by any business owner. Alternatively, legal professionals are well versed in writing Articles of incorporation and can assist you throughout the Business incorporation process.

It is important not to confuse Articles of incorporation with the company by-laws. Although both documents need to be lodged with the relevant regulatory body, they differ slightly in their content. Articles of incorporation outline the organisational framework of a company, such as its head office, number of available shares, directors and purpose. Company by-laws however encompass the internal management of the company. This often include details such as how board meetings will be organised, the manner in which directors will be elected, and the frequency of shareholder meetings.

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