An attorney is not required to file Articles of Incorporation. However, if you decide not to use an attorney, you should educate yourself thoroughly regarding all aspects of a corporation. The following are basic definitions related to filing Articles of Incorporation and should not be considered comprehensive legal advice. For example, common stock and preferred stock are the two classes of stock that a corporation may issue. In addition, stock may have other attributes and combinations of attributes that define a stockholder’s rights. Articles of Incorporation may include additional information regarding the management, structure, purpose and goals of the corporation that are not outlined here.
Corporation Name is the name you wish to call your corporation. The name must include the word corporation, company, incorporated or limited or an abbreviation of one of these words. The name may not be the same as any existing corporation. You may check on the name availability by going online at www.sos.state.co.us select business center, then under the business information column you can search business database to see if the name is being used. If it is not being used go to file a document and you are creating a new record. Fill out the form for a profit corporation. When you complete the form online you will be able to submit online with a charge card. The Secretary of State is located at 1700 Broadway, Suite 200, Denver CO 80202.
Cumulative Voting is the ability of a shareholder to vote the number of shares owned multiplied by the number of directors to be voted on. For example, if shareholder “A” owns 100 shares and three directors are being elected, shareholder “A” has 300 votes to cast for any one director or he can split up the votes and cast any desired number for any one or more of the candidates.
Duration, the life of a corporation, is perpetual unless otherwise stated in the Articles of Incorporation. This means that a corporation will exist for an indefinite period of time, potentially forever, unless a specific number of years are stated. Most corporations are perpetual in duration.
Preemptive Rights entitle each shareholder the right to maintain the same proportion of ownership if additional stock is issued. If a stockholder owns 25 percent of current outstanding stock, she/he would have the option to purchase 25 percent of new issues before the stock is offered to anyone else.
Common Stock normally has the following characteristics: The right to vote for the board of directors. The right to receive dividends when declared by the board of directors. The right to share in the distribution of assets, after creditors and preferred stock, if the corporation is liquidated.
Preferred Stock is normally associated with the following characteristics: Very limited voting rights. Preference over common stockholders for receiving dividends. A preference over common stockholders, after creditors, in the distribution of assets if the corporation is liquidated. The stock may be repurchased by the corporation at the option of the corporation.
Authorized Shares are the total number of shares that the corporation has the authority to issue. If there is more than one class, record the number of shares in each class. The number of authorized shares may only be changed at a later date by a vote of the stockholders as provided in the bylaws.
Par Value stock must have a stated value in the Articles of Incorporation. The stock cannot be issued unless par value is paid to the corporation.
No Par Value (NPV) stock is issued at a value determined by the board of directors at the time of issue. Generally, the value is determined by whatever price the market will bear when the stock is issued.
A Registered Agent may be an individual or another corporation who represents the corporation. Although a post office box may be included, the registered agent must have a physical address on record at all times with the Secretary of State. The address may or may not be the corporation’s place of business.
A Board of Directors must have one or more members and the number or method of determining the number must be specified in the bylaws. Directors must be at least 18 years of age.
Incorporators are the individuals who perform the initial steps of incorporation. They may or may not be involved in the corporation’s activities after the formation of the corporation. Incorporators must be at least 18 years of age.
Bylaws are the rules by which a corporation is managed and regulated. The bylaws are adopted and amended by the board of directors.