If the articles reference public purposes or if the corporation files for state tax exemption, a further description of the corporation’s specific purposes is required. However, if you expect to have a more complicated arrangement regarding, for example, which shareholders are entitled to vote on mergers or receive dividends, you should consult with an attorney or other expert before deciding on share classes. What are the advantages of legislation over precedent? It continues to exist until it's legally dissolved or merged into another business. However, your particular state may have a different name for the document (for example, “certificate of formation”) or a different state office where it needs to be filed (in Maryland, the State Department of Assessments and Taxation; in Arizona, the Arizona Corporation Commission). This may risk the charity and its board to charges of misrepresentation and acting beyond their powers (ultra vires). Most shareholders and board members are usually able to vote, but those who can vote and how much weight their vote may carry will vary by company. It is often kept with the internal corporate records. Shareholders are not legally liable for the corporation's actions, debts, and obligations. Most states do not require you to be specific about the purpose of your corporation, and it is generally not advisable to provide specific statements. When the Articles of Incorporation are filed that begins the existence of a corporation. Amending the corporation’s bylaws or articles of incorporation to reflect changes or actual practices of the business is a great way to keep the business running smoothly. You need to change the title in the property documents, prepare new deeds, and take several other administrative steps. to eliminate prejudice and discrimination, to defend human and civil rights secured by law, or. Corporate bylaws are often much more in-depth compared to the articles of incorporation. to combat community deterioration and juvenile delinquency. In California, a nonprofit public benefit corporation (the appropriate type of corporation for a charity) must state that it is organized under the Nonprofit Public Benefit Corporation Law for public, charitable, or public and charitable purposes. The registered agent must be located in the state where your corporation is formed and you must provide a physical—street—address for the agent. By entering this site you agree not to use LegalNature.com as legal In most states, the document is known as the articles of incorporation, and in most states it needs to be filed with the Secretary of State. However, to the extent that a charity wants to really lock in its purpose to prevent future boards from easily diverging from its original intended course, a specific purpose statement may be added to the articles of incorporation following the more broader statement exemplified above (e.g., “The specific purpose of this corporation is to provide preschool education to children in the Richmond district.”). Usually, information required in the articles of incorporation will include: Each state has slightly different requirements, so it is important to consider where the business is being incorporated before filing the articles of incorporation. Also, with its status as an independent entity, it's able to own property, enter contracts, and it can also be sued or file suit against others. Transferring the ownership of proprietorship and partnership businesses can be quite cumbersome. For example, if you submit articles of incorporation for a company named Bassoon Lagoon, Inc., and there is already a Bassoon Lagoon, LLC in your state, your filing will be rejected. Any of these events may trigger the need to adjust a business’s articles of incorporation or its bylaws. Incorporator's (or Officers’ or Directors’) Names and Addresses. Very few, if any, donors will make the decision to donate based on the purpose statement in the articles, particularly if it contains the broad language described above. “Public” in such context is not defined in the Corporations Code. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state. For example, you can. Incorporation makes it much easier to raise capital for your business. Because votes are linked to shares, shareholders are able to maintain control over the corporation. They provide specific information about how a corporation will be run, including the rights and responsibilities of those who oversee the corporation. Otherwise, a description of the corporation’s purpose (e.g., a specific purpose statement) is optional. They are filed with the Secretary of State and must contain required information laid out by statute. Your use of this website constitutes acceptance of the Terms of Use, Supplemental Terms, Privacy Policy and Cookie Policy. Even if bylaws are not required, they provide a helpful guide for the business, so it is a good idea to create them.

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