Summary
Highlights
The articles of incorporation are a document prepared by the incorporators and filed with the Securities and Exchange Commission (SEC) to establish a corporation. This is the second step in forming a corporation, following promotion.
Section 13 of the Revised Corporation Code outlines the necessary contents. First, the corporation must have a name. Second, its purpose or purposes (primary and secondary) must be stated clearly. This defines the limits of the corporation's business activities; anything outside these purposes is considered ultra vires. The purpose must be lawful and clear to investors and directors.
The articles must specify the principal place of business, which refers to where the corporation's books are kept or where officers meet for management, not necessarily the actual direct business location. For example, a grocery store's main office address would be listed, not the store's physical address, if they are different.
If the incorporators do not elect perpetual existence, the articles must state the agreed-upon number of years for the corporation's existence. If no term is specified, the default is perpetual existence.
The names, nationalities, and residence addresses of the incorporators must be included. Nationality is crucial for determining compliance with ownership percentage requirements for certain corporations.
The number of directors for a stock corporation (not more than 15) or trustees for a non-stock corporation (can be more than 15) must be stated. Also, the names, nationalities, and residence addresses of the initial directors or trustees who will serve until regular elections are held must be included.
For stock corporations, the authorized capital stock, number of shares, par value per share, original subscribers, subscribed amount, and paid amount must be specified. If there are no-par value shares, this must also be stated.
For non-stock corporations, the capital, along with the names, residence addresses, nationalities of contributors, and their respective contributions, must be detailed.
Incorporators can add other lawful and convenient matters. The articles of incorporation are vital as they serve as the corporation's charter or law, defining contractual relations with the state, stockholders, and among stockholders. The SEC reviews these articles to ensure compliance with Section 13.
Section 14 prescribes a form for the articles of incorporation, which can be found on the SEC website. While a customized form is acceptable, it must substantially follow the prescribed format. Failure to include all required details risks rejection by the SEC for a certificate of incorporation.