The Corporate Charter

By: Allen T. May, C.E.O. of Westwood Associates, LLC

When you decide to incorporate your business, several things need to be considered. For instance, will you be incorporating in your home state or in another state? An incorporated business is called a domestic corporation in the state in which it is incorporated. In  all other states where it does business, it it called a foreign corporation. For example, Sears Holdings Corporation, the parent company of Sears is incorporated in Delaware, where it is a domestic corporation. In the remaining 49 states, Sears is a foreign corporation. Sears must register in all states where it does business and also pay taxes and annual fees to each state. A corporation chartered by a foreign government and conducting business in the United States is an alien corporation. Sony Corporation is an example of an alien corporation.

Once a home state has been chosen, the incorporators submit "Articles of Incorporation" to the secretary of state. When the articles of incorporation are approved, they become a contract between a corporation and the state in which the state recognizes the formation of the artificial person that is the corporation. Usually, the articles of incorporation include the following information:

> The firm's name and address

> The incorporators' names and addresses

> The purpose of the corporation

> The maximum amount of stock and types of stock to be issued

> The rights and privileges of stockholders

> The length of time the corporation is to exist

To help you decide if the corporate form of organization is the right choice, you may want to review the material available on the Yahoo! Small Business Web site at http://smallbusiness.yahoo.com. Once at the site, click on Resources. In addition, before making a decision to organize your business as a corporation, you may want to consider two additional areas: stockholders' rights and the importance of the organization meeting. 

Westwood Associates, LLC will gladly work with you and your attorney in selecting the right business structure for you. While we advocate a limited liability company (LLC) as one of the best options for entrepreneurs, sometimes a c-corporation is the best structure. At the end of the day, many factors are to be considered when making such an importance decision. 

For additional information, you can reach me as follows:

Allen T May

Cell: (214) 893-2623

Email: allentmay@gmail.com