“A governing document that sets forth the basic terms of an entity’s existence.”
Often shortened to “Articles”, the Articles of Incorporation (for a Corporation) and Articles of Organization (for an LLC) are the founding document for an entity. Articles are typically filed with the Secretary of State (by way of the local Probate Court) where the entity will be formed. Articles set forth basic information about the entity. Common details included in the Articles are:
- name of the entity
- how long the will entity last
- who owns the entity when it is formed
- registered office and agent
- management structure of the entity
- how the governing document will become effective
Articles must be signed by a member or an organizer of the entity. Articles and the Federal Employer Identification Number are typically all that is required by a bank to set up an account.
The filing of the Articles signifies the formation of an entity. It is, however, the governing documents (bylaws or operating agreement) of the entity that matter the most to the owners of the business.
It is important to be very intentional about the items included in the Articles. You want to include what is necessary and prudent for your circumstances, but be careful that you do not restrict yourself unnecessarily by creating a more complex way to adjust how things are done in your entity by placing requirements in the Articles that do not need to be included. Amending the Articles requires filing with the Secretary of State (which will include more filing fees).
A common way to make sure any necessary amendments may be made without amending the Articles is to reference the governing document and state that anything else to do with the company may be outlined in the governing document as long as it does not conflict with the Articles or applicable law. That way, the business will be controlled by the governing document and there will not be as much need to amend the Articles to make changes in the company. This helps avoid unnecessary complexity and filing fees for what would otherwise be simple adjustments to the business.
Remember to keep your Articles as basic as possible while covering all of the required elements.