Articles of Incorporation are legal business incorporation documents for Canadian or American companies. Depending on where the business is incorporated, the documents are filed with a state, provincial or federal governing body. These documents are a required part of the incorporation process, and list the reasoning behind why a corporation exists.
The Purpose of Articles of Incorporation
An article of incorporation, when filed with a government agency, creates the corporation as well as how the shares of the company will be structured. The Articles of Incorporation also explain who is actually incorporating the business (i.e. the individuals filing the forms), and may list the initial directors of the company as well. Any rules or regulations of the business are laid out in a related, attached document, called the Bylaws of the corporation.
Is The Article of Incorporation All That’s Needed?
It depends on where the business is incorporated. In Canada, there are a few forms to fill out (Articles of Incorporation Form, Restated Articles of Incorporation Form). In the US, most states require more than just an article of incorporation (see: Articles of Incorporation Form), such as an annual report. After filing for incorporation in the US, the business directors will receive the necessary documents in the mail.
Article of Incorporation Sample Template – Restriction on the Transfer of Shares
Please do not take the following information as legal advice. This is merely an article of incorporation sample, and will require review by a lawyer familiar with business incorporation procedures in your jurisdiction before use.
The ability and legal right to transfer the corporation’s shares is restricted, in that shareholders are not allowed to transfer corporate shares without written agreement from:
- the directors of the incorporated business, who require a resolution agreed upon by the majority of directors, as decided in writing or at a meeting of the corporations shareholders; or
- the corporate shareholders, who require a resolution agreed upon by the majority of eligible shareholders.
Article of Incorporation Sample Template – Other
Securities held by the corporation cannot be transferred without:
- agreement by a majority of the incorporated businesses’ directors; or
- agreement by a majority of the incorporated businesses’ shareholders.
If the law so allows in the corporation’s jurisdiction and by agreement with the majority of shareholders, the directors of the corporation may:
- use the corporation’s credit to borrow necessary funds;
- state, release, sell or guarantee the debt assets and liabilities of the corporation; and
- create a security interest with regards to the property of the corporation, in order to shelter the debt assets or liabilities of the corporation.