Under the United States law, adults can form a corporation by signing, acknowledging and verifying a statement of incorporation under oath. A statement of incorporation states the location of the business, its vision and mission. Other information includes the bylaws that govern the corporation and its responsibilities to the customers.
Purpose of the Organization
Every business is formed for a reason. A statement of incorporation identifies the business, the nature of business it is intended to do. It also elaborates the functions of the company. If you're forming a condominium association, for instance, the statement of incorporation establishes the rules and regulations governing the condominiums. Such an association would also require to levy and collect assessments against condominium unit for common expenses. This information must be included in the statement.
Common Shares and Incorporation
The statement of incorporation also states the names and physical addresses of people to hold common shares the amount subscribed and paid by each one. It must also indicate that the currency for common shares must be in legal tender of the United States. Such shares must be issued at one, and the subscription by shareholders must be fully paid by the time the articles of incorporation are filed with the Secretary of State.
Responsibilities to the Customer
A statement of incorporation must also include the company's responsibility to the customer. If you're forming a foundation to provide a leisure park for residents in a certain area, you must be able to state fully the service you intend to provide. Your duty is to provide a park with facilities that enhance the lives of the people it serves. The statement has to clearly state how it intends to accomplish its mission.
Management and Accountability
The statement also sets the rules under which management or the board of directors is formed and managed. At the core of every organization is the issue of finances. In the structure of management, a statement of incorporation identifies the custodian of the organization's finances and the checks and balances in place to ensure transparency.
Appointment and Termination
In an organization with voluntary members such as a club, a statement of incorporation states the rules than govern membership. It also establishes the due process for termination of membership. A statement of incorporation also states how board members are appointed or elected and their office tenure.
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Gilbert Manda - Gilbert Manda has worked for Demand Media, writing business and financial features. His articles mainly appear on eHow.com and ...
