What is Articles of Incorporation?
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. A limited duration may optionally be stated; otherwise a Delaware corporation has perpetual existence. Optional provisions include indemnification of directors and officers, exculpation of directors and officers from monetary liability for breach of the duty of care (not for breaches of the duty of loyalty, acts not in good faith, intentional misconduct, knowing violations of law or improper personal benefit; officers remain liable in claims brought by or in the right of the corporation), and special voting requirements for certain actions.
Amendments
The board first adopts a resolution declaring the amendment advisable; stockholders then approve it by a majority of the outstanding stock entitled to vote, plus any required class votes. Some amendments, such as a name change, need no stockholder vote. 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 Delaware Secretary of State and become effective upon filing or at a later stated time (no later than 90 days after filing).
Sources. Delaware General Corporation Law (8 Del. C. ch. 1).