As part of the incorporation process, however, you will need to obtain and provide a certificate of incorporation.
Luckily, acquiring this document is relatively straightforward; to guide you in the right direction, though, we've compiled a quick and easy guide on how to get one – regardless of your jurisdiction.
What Is a Certificate of Incorporation?
First, though, it is necessary to understand what a certificate of incorporation is – and when and why you will need one. In simple terms – and in most legal systems – a certificate of incorporation is a legal document that indicates that you, as the company's owner, have formed and registered your organisation as a limited company. It is a public document and can be easily accessed by anyone seeking information about your organisation.
Why Do You Need One?
Primarily, the main benefit of possessing a certificate of incorporation is that it provides a legal grounding on which your company can stand. It has previously been used as admissible evidence in court cases, for instance, while it also allows you to add the terms "limited" or "LLC" to your organisation's name.
It can also come in handy when you want to open a business account with a bank, or when seeking a loan to fund your business. It makes it easier for banks or financial institutions to run background checks on your company, as well as providing it with a greater sense of credibility. The certificate can also prove helpful when you are looking to sell new shares to investors, as it will give them instant access to relevant information about the company.
How Do You Obtain a Certificate of Incorporation?
In most cases, the application form for this certificate is available online through the relevant governing business agency in your jurisdiction. This will be the Companies Registry in the US, for instance, or Companies House in the UK. It's worth noting that once you fill out the details, you will most likely be asked to enter your credit card information and pay any applicable fees.
You can also – in most cases – choose whether to submit online as a PDF or through the post. In the US, some states may require one or the other, so be sure to check the operating policy of your relevant agency.
The process of incorporation involves filing a specific set of documents related to your company and its functioning; these documents are known as articles of incorporation and, although similar in several jurisdictions, are different entities. Also known as corporate charter and articles of association, they will provide the following details:
- The name of the company in full.
- The type of corporation you are constituting, such as a non-profit, stock corporation, or non-stock corporation. You will also have to include details about the number of shares of stock (and their price) if you are forming a stock corporation.
- The objectives of the company, including the purpose behind selling a particular product or service. The kind of details required here will vary by region, as well as the government body in charge of incorporations.
- A list of the directors that will make up the board. In some instances, you may be asked to offer a list of corporate officers, such as treasurer, president, and others.
- Information about the incorporator (as it is this individual who will file the articles of incorporation). The incorporator can also be entrusted with the appointing of board members.
- The duration for which the corporation is being set up. While most corporations are intended to exist perpetually, there may be those that are set up for a fixed period.
- Contact information and any other details about the registered agent. This is not a mandatory requirement, but having a registered agent who will receive any legal documents or essential papers on behalf of your company can prove useful. A physical address must be available for your registered agent (PO Box addresses, or similar, are unlikely to be accepted).
After you have submitted the articles of incorporation along with payment and any other required details, the government agency in charge will process your application in alignment with their specific timelines. Depending on how you submit it (online or through the post) – and from where – you can expect to wait anywhere between a couple of hours to ten days before it is approved.
Once the processing is complete, and all your paperwork is found to be in order, you will be issued your certificate of incorporation (also known as an article of organisation).
What Is on a Certificate of Incorporation?
Your certificate of incorporation will contain all the relevant information about the structure of your organisation, as well as the names of its office-bearers. Much of this is likely to be the same as the information you include in your articles of incorporation, such as:
- The name of the company
- The corporate structure of the organisation (i.e. non-profit or profit corporation)
- The name and address of the company's registered agent
- Details about the incorporator, or the person entrusted with the responsibility of setting up the corporation
- Information about the initial board of directors
- The number and type of authorised shares
- The effective date of incorporation
- Details about whether managers or members manage the company
Once you receive the certificate, be sure to return to your relevant government agency website, and check the information that it returns when searching for your company. This is the information that will be visible to anyone that wants to check the credentials of your organisation.
Hiring an attorney is not mandatory for this process, although if you prefer to enlist the help of a corporate lawyer, many firms will be willing to help. However, by following the steps above, there is no reason why you shouldn't be able to complete this relatively straightforward process by yourself.
Do you have any other tips for securing a certificate of incorporation? If so, let us know in the comment section below.