Starting a business in North Carolina is an exciting – and complicated – process. It’s normal to be overwhelmed by all of the steps that go into turning your business into a legit entity. An important thing to be aware of as you’re starting your business is the articles of incorporation. In short, these are the documents that you will file with the government to legally create your business.
What the articles of incorporation do
Articles of incorporation give your business some financial and tax advantages. One of the huge advantages for business owners is the ability to issue stock and raise capital.
Being able to raise capital is oftentimes the biggest hurdle that new businesses face. For many, this can be the difference between a super small side gig and a business with massive potential for growth.
You’ll also get some good tax benefits compared to if you were filing as an independent contractor or small business. In addition, filing your business with the government can create a shield, protecting you and your co-owners from liability under certain circumstances.
What goes into articles of incorporation?
In business law, the articles of incorporation officially establishes your business as a legal entity in the United States. They include some basic information, such as the name of your business, the name and address of the primary business owner, the number and type of authorized shares and more.
In addition, you’ll want to include the type of structure of the business. This section of the articles will let the government know if you’re a corporation, nonprofit organization, etc.
Some states will also have you list the company’s purpose, but you can be vague. In addition, you can put forth certain guidelines – like the limitations of your board of directors or the actions your stockholders can take independently.
Are the articles of incorporation the only forms you’ll need to file?
The short answer is no; they’re not the only forms you’ll need to file. Instead, they’ll be filed along with other documents such as your business license. The types of forms you’ll need to file depend largely on your business and the state you reside in, so it’s important to be thorough in your research.