Legal Issues Regarding Articles of Incorporation by anamaulida


									Most states have standard documentation that must be filled out in order
to form a legal entity. These forms have been condensed to ensure that
lawyers cannot submit lengthy incorporation documents filled with
unnecessary information. The information that is most important on these
incorporation documents is the name of the business entity, the name of
the owner or registered agent, the names of the officers and/or
directors, as wells as a clear purpose as to why the corporation should
exist.Corporate lawyers who specialize in wording that will be most
beneficial to the corporation normally write the purpose section of the
incorporation documents. General language is most often used in today's
documentation, however it was more common years ago to draft a purpose
with specific information that could be understood by the
courts.Nowadays, when a corporation is formed, the purpose can be
something like, "to perform business for any lawful purpose." In the
years prior, though, the purpose would be specific to a certain area of
business. For example, if it were a business that served ice cream, the
purpose would be to serve ice cream and nothing else. The corporation
would not legally be able to branch out into other businesses, so the
same corporation wouldn't be able to open a retail shop. The law
eventually changed because companies - such as the ice cream company -
wouldn't be allowed by law to serve hot dogs and hamburgers, even though
it made perfect sense to sell all types of food at the establishment. If
the company decided to sell items other than ice cream and somebody
complained, there would be a legal battle in the courts. Eventually, the
courts decided that it would be wrong to limit a corporation's future
endeavors by following the initial purpose laid out in the articles of
incorporation to the T.These limitations made sense back many years ago,
but in today's society, corporations need to be able to engage in many
types of different business activities and invest in new opportunities.
The modern way of completing the standardized articles of incorporation
allows corporations to diversify and invest in any business allowed by
law. If the old way of limiting a corporations purpose were still in
effect, there would be many more lawsuits every time a corporation did
not follow the specifics of the purpose section in the articles of
incorporation.In order to craft a well-worded purpose, a corporate lawyer
experienced in business law should draft the section. This will ensure
that a newly formed corporation will be able to invest in new ventures
and opportunities as they arise. Furthermore, a well-written purpose will
keep you out of court and allow you to pursue contracts without fear of
violating your articles of incorporation.

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