Learn something new every day More Info... by email
A corporate charter, also known as articles of incorporation, is among the founding documents of a business operation. The exact scope of information contained in this type of business charter will vary, based on the laws and regulations that apply in the jurisdiction where the business is actually incorporated or registered. Before the business can be legally recognized, the contents and format of the charter must meet with the jurisdiction’s standards, containing all data required, and sometimes even in the order or format required by law.
While the content of a corporate charter may vary from one jurisdiction to the next, there are a number of elements commonly found in all business charters. The most basic detail has to do with the name or names of the company itself. This will include both the legal name of the company as well as any secondary names that may be used from time to time to identify the corporation. Those ancillary names are sometimes known as DBAs or doing-business-as names. Including those in the charter often helps to prevent the need to make amendments later or create additional legal documents to protect the rights of the business to those names.
Other basic details must also be included in the corporate charter. The names of the corporation founders as well as a physical location for the company are essential. In addition, the main function of the business operation must also be identified. The function may be noted in terms of a broad connection with a particular industry type or be very specific, depending on the laws and regulations that apply. The idea behind identifying the purpose and basic activities of the company is often helpful in terms of positioning the company to take advantage of any tax breaks that are relevant to specific types of business enterprises.
Financial data is also often included in a corporate charter. This includes information that provides details on assets held by the business, in terms of cash, real estate, and other holdings. Data of this type must be verifiable, including any assets that are being held by a trustee in anticipation of the granting of the corporate charter.
It is not unusual for a corporate charter to also include information on the company structure in terms of provisions of how shares of stock will be issued, the rights and responsibilities extended to shareholders, and other matters relevant to those who would invest in the business at some future point. This is important, since including the details and processes that the company will use to work with shareholders must be in compliance with governmental regulations that are in force at the time of the granting of the charter.
A number of other elements will be found in just about every corporate charter. A roster of company officers along with contact information is typically included. Defining the internal governing bodies within the company structure will also be part of the requirements. In many countries, defining the basic duties and responsibilities of corporate officers and those governing bodies must also be included before the charter will be approved. For specific information on what must go into a corporate charter, consulting legal counsel that is well informed with the laws and regulations that apply in the jurisdiction will often save time and money, and increase the chances of being granted the charter on the first attempt.
One of our editors will review your suggestion and make changes if warranted. Note that depending on the number of suggestions we receive, this can take anywhere from a few hours to a few days. Thank you for helping to improve wiseGEEK!