Certificate of Incorporation/More Info


Certificate of Incorporation 
Additional Information 
 
Included with this document is advice on the law in each state on various matters.  This information is extracted from statutes and case law in each state and is general only.   

Each state has its own requirements for incorporation.  In many cases the certificate must conform to those requirements exactly.  Check with the state or an attorney before filing. 
 

Picking the State 
 
When forming a corporation, the first thing to determine is what state the corporation will be formed in.  You are not required to form the corporation in the state where you reside - you may select another state, even though you do not live there.  Delaware long ago liberalized its laws regarding the formation of corporations in an effort to attract businesses to organize there.  Although many states have subsequently adopted Delaware type laws, or otherwise liberalized their own corporation laws, many people still choose to incorporate in Delaware if one desires incorporation. 

Many factors must be considered in picking the right state, and most small corporations find it advisable to incorporate in the state where the corporation will be doing most of its business.  One of the main reasons for this is that if you incorporate in Delaware, Nevada or some other distant state, you will be considered a "foreign corporation" in your home state.  This means that you will need to become qualified as a foreign corporation, which involves preparing and filing the appropriate forms and paying foreign corporation fees.  The corporation may also be required to pay additional income taxes. 


Naming the Corporation 

The next step is to choose the name of your corporation.  You cannot choose just any name.  The name that you select must be approved by the state in which you incorporate.  This ensures that the state doesn't have duplicate or confusingly similar names.  The state will also refuse to incorporate you if your proposed name may be deceptive to the public.  For example, if you plan to incorporate a used car business, you probably cannot incorporate under the name "General Motoring Corporation."  Also, your name must clearly identify the entity as a corporation.  This means including "Corporation", "Incorporated", "Company" or some other term or approved abbreviation in the corporation's name. 

In most states, you can call the office of the secretary of state and submit a proposed name for consideration.  If the state office tells you that the name is available, you may reserve that name by sending a written request and paying a fee.  Ask about the process for reserving the name when you call. 


Incorporator 

A corporation is formed when a person (or, in some states, a corporation or other entity) files the appropriate paper work (the Certificate or Articles) and pays certain fees.  The person who files the documents and takes the other actions necessary to form the corporation is called an "incorporator."  Except for Puerto Rico (which requires three incorporators), only one person is needed.    

Virtually anyone can be an incorporator.  A few jurisdictions (Alaska, Colorado, District of Columbia, Maryland, Minnesota, Missouri, Nebraska, Nevada, New York, North Dakota, Pennsylvania, Puerto Rico, South Dakota, Utah and Vermont) require that the incorporator be a "natural" person.  The incorporator should be an adult and have the legal capacity to enter into contracts.   Otherwise, there is not ordinarily any other requirement.      


Authorizing Stock 

The next step is to decide how much common stock the corporation will be authorized to issue and whether that stock will have a "par value".  The par value you assign to each share, if any, has little significance.  Basically, if you assign a high par value, your balance sheet will show a higher amount of "stated capital" or "paid in capital".  If you assign a low or no par value, the corporation's balance sheet will show a relatively lower figure as stated or paid in capital, but a higher figure of "paid in surplus."  The par value, if any, does not have anything to do with how much the initial shareholders will pay for their stock, or the ultimate value of that stock. 

You may want to keep the authorized number of shares relatively small, as many states charge a foreign corporation qualification fee based on the number of shares authorized.  If you opt to keep the number small, make sure to authorize at least enough to fulfill initial stock subscriptions (i.e., the initial stock purchase) with some left so that you can issue additional stock later. 


Registered Agent 

You will also need to designate a registered agent for the corporation.  This is a person or an office that resides in the state where the corporation is formed and is available to accept service of formal letters, notices and summonses.  If you are not a resident of the state where the corporation will be formed, or if no one is available to serve as a resident agent, you can hire a business to act as your resident agent.   

For example, the CT Corporation System (http://www.CTAdvantage.com), has offices in all 50 states and the District of Columbia to act as the registered office for corporations.  These companies charge a fee for serving as your registered office. 


Secretaries Of State 

Incorporation document should be titled "Articles of Incorporation" or "Certificate of Incorporation" (there is no difference other than the title).  Business Attorney recommends that you confirm which is required in your State by contacting your local Secretary of State.  Many state offices will provide "fill in the blank" forms for incorporating.  These forms can often be downloaded from their website.  These may be particularly useful if you incorporate in a state that does not follow the Delaware corporate law.  Some of these forms may actually be simpler than this Certificate, though finding any advice on how to fill them in may prove difficult.  Many state offices will provide additional instructions and filing information, while others are not as helpful.  If you do end up using a state form, you may want to read all of the section explanations in this Certificate of Incorporation anyway, as they should give you a better understanding of the state form. 


Directors 

Some states do not require the Certificate of Incorporation to set forth the names and addresses of the initial directors.  Others require initial directors to be identified, usually including addresses.  At the end of this window is a list of all U. S. jurisdictions, and a statement for each as to whether the Certificate of Incorporation must include the names and addresses of directors. 


Where to File 

In most states, filing the incorporation documents centrally with the Secretary of State or other state office is the only filing requirement.  However, the following 15 states have additional filing or publication requirements:   

Alabama - File with county judge, who then forwards to Secretary of State 
Alaska - Deliver to the "commissioner" for processing 
Arizona - After filing with state, must file in county of registered office 
Delaware - After filing with state, must file in county of registered office 
Georgia - After filing with state, must file in county of registered office 
Illinois - After filing with state, must file in county of registered office 
Iowa - State office forwards articles for local filing 
Kansas - After filing with state, must file in county of registered office 
Louisiana - After filing with state, must file in county of registered office 
Maryland - State office forwards articles for local filing 
Mississippi - After filing with state, must file in county of registered office 
Nebraska - After filing with state, must file in county of registered office and publish locally 
Nevada - After filing with state, must file in county of registered office 
New York - State office forwards articles for local filing 
North Carolina - After filing with state, must file in county of registered office 
Pennsylvania - Local publication required 
Virginia - State office forwards a certificate for local filing 
West Virginia - After filing with state, must file in county of registered office 

 
Additional Documents 

The states of Alaska, Arizona, Connecticut, Louisiana, Maine, Maryland, New Hampshire, Nevada, Ohio and Pennsylvania require that additional documents be filed with the Articles or shortly after filing.  These requirements vary, but usually include certification of some information.  Check with the Secretary of State's office for more information on these requirements.  Those sites are set forth below and you can also reach them through the National Association of Secretaries of State website at http://www.nass.org. 


Next Steps  
 
After filing the certificate of incorporation, you should promptly prepare additional documents to "kick off" the new corporation. Among these are the Action by Incorporator, the Bylaws, and the Unanimous Written Consent of The Board Of Directors In Lieu Of The First Meeting.  All of these documents and their attachments should be placed in the corporation's minute book and maintained in a safe place. 

After these initial documents are prepared and properly filed the corporation's minute book, make sure to properly hold all of the required annual meetings, and to properly address all of the other legal requirements.  This will help to ensure that the corporation remains separate and distinct from the shareholders. 

Director Requirements by State 

Following is a list of states, and whether or not the state requires the names and addresses of directors to be included in the certificate or articles of incorporation.  If not required, you may list them at your option. 

In virtually every state, a corporation need have only one director and the number may be fixed in the Articles or the bylaws.  To protect the shareholders, many states also require that if the number is fixed in the bylaws and it will be changed by more than 30%, the shareholders (i.e., not just the directors) must approve the change.   


Names and addresses of directors  
 
Alabama - Required  
Alaska - Required  
Arizona - Required 
Arkansas - Not required (optional)  
California - Not required (optional) 
Colorado - Not required 
Connecticut - Not required 
Delaware - Not required (more below) 
District of Columbia - Specify number (and name, if any) 
Florida - Not required (optional) 
Georgia - Required 
Hawaii - Required 
Idaho - Required 
Illinois - Not required (optional) 
Indiana - Not required (optional) 
Iowa - Not required (optional) 
Kansas - Not required (more below) 
Kentucky - Not required (optional) 
Louisiana - Not required 
Maine - Not required (more below) 
Maryland - Required 
Massachusetts - Required 
Michigan - Not required 
Minnesota - Not required (optional) 
Mississippi - Not required (optional) 
Missouri - Not required (more below) 
Montana - Required 
Nebraska - Not required 
Nevada - Required 
New Hampshire - Not required (optional) 
New Jersey - Not required 
New Mexico - Required 
New York - Not required 
North Carolina - Required 
North Dakota - Not required (optional) 
Ohio - Not required 
Oklahoma - Not required 
Oregon - Not required 
Pennsylvania - Not required 
Puerto Rico - Not required 
Rhode Island - Required 
South Carolina - Not required (optional) 
South Dakota - Required 
Tennessee - Not required (optional) 
Texas - Required 
Utah - Not required (optional) 
Vermont - Required 
Virginia - Not required 
Washington - Required 
West Virginia - Required 
Wisconsin - Required 
Wyoming - Required 

Maine and Missouri require that the number of initial directors be stated, but makes naming them optional.  Delaware and Kansas require the names and addresses of the initial directors only if the powers of the incorporators are to terminate upon filing the Certificate.  In California, if the initial directors are names in the Articles, then each director must also sign and acknowledge them. 

The Delaware corporation laws are used by a majority of corporations in the United States.  For this reason, the Certificate of Incorporation document provided in Business Attorney is patterned after the Delaware statutes, and we believe that it is more flexible and useful than the form documents provided at the state websites listed below.   

However, it is recommended that you also check the corporation filing requirements for your individual state to obtain any additional information you need to complete the incorporation process in your chosen state.