What is the purpose of articles of incorporation?
Articles of incorporation are filed in the state where the owners will incorporate a business. It’s a short document that includes the purpose of the business and information on company stocks.Declares Desire to Form a CorporationThe articles of incorporation officially declare that a business wants to become a corporation. The owners of the business want a separate entity apart from themselves, and incorporating accomplishes this. This declaration is important to protect the owners from personal liability damages in a lawsuit.Creation of the CorporationFiling this document is what’s needed to create the corporation. The office of the secretary of state approves or disapproves the corporate status of the business. When the articles of incorporation are approved, the business is registered as a corporation.Informs the Public About Sale of StocksSome articles of incorporation will state any restrictions on the transfer of shares. The document will also list the classes of shares, as well
