TLDR:
Articles of incorporation (or certificate of incorporation) is the foundational legal document filed with a government authority to formally establish a corporation, defining its purpose, structure, and initial governance.
Why Articles of Incorporation Matter
The articles of incorporation are the legal birth certificate of a corporation. Without them, a company has no legal existence as a separate entity, meaning founders would have unlimited personal liability for business debts and obligations. Once incorporated, the corporation becomes a distinct legal person capable of entering contracts, holding property, suing and being sued, and continuing beyond the life of any individual shareholder. For startups, the choice of state of incorporation (most commonly Delaware) significantly affects investor expectations, governance flexibility, and the legal frameworks available for equity structures.
Delaware Advantage
Common Provisions
Articles of incorporation include the company name, registered office address, registered agent, corporate purpose, authorized shares (number, classes, par value), incorporator information, and the duration of the corporation. Optional provisions include indemnification of directors and officers, exculpation of director liability for breach of fiduciary duty (other than for breaches involving bad faith or self-dealing), and special voting requirements for certain actions.
Amendments
Articles can be amended through stockholder vote, typically requiring majority approval (or higher thresholds for protected provisions). Common amendments include: increasing authorized shares (to accommodate option pool expansions or new financing rounds), creating new series of preferred stock with specific rights and preferences, changing the corporate name, and adopting protective provisions for new preferred classes. Amendments are filed with the relevant state authority and become effective upon acceptance.