Articles of Incorporation: What to Include and Why

Don't Be a Tourist on Your Own Cap Table

Your Articles of Incorporation aren't a bureaucratic checkbox. They are the constitutional document for your company. Getting them wrong creates a legal mess that will, best case, cost you thousands in legal fees to clean up or, worst case, kill an investment deal or your entire company.

Think of it this way: the Articles establish the legal container for the equity you're creating. This document is the bedrock of your cap table, your fundraising efforts, and your personal liability protection. Let's get it right.

The Default Answer: Delaware C-Corp

Before we break down the components, let's establish the gold standard. If you plan to raise venture capital, you should incorporate as a C-Corporation in the state of Delaware. Period.

Why Delaware? It has the most developed, predictable, and respected body of corporate law in the U.S. Its courts (like the Court of Chancery) specialize in corporate disputes. Investors and their lawyers are comfortable with Delaware law; introducing a different state adds friction and a perception of amateurism. · Why a C-Corp? C-Corps can have multiple classes of stock (like the Preferred Stock VCs require), which is difficult for LLCs or S-Corps. C-Corps also allow for certain tax advantages, most notably the Qualified Small Business Stock (QSBS) exemption, which can be a massive benefit for founders and early investors upon exit.

Common Founder Mistake: Starting as an LLC or S-Corp to "save on taxes." While there might be some short-term tax advantages, converting an LLC to a C-Corp later is a complex, expensive legal process that can create tax headaches and messy IP ownership issues. If a VC is ready to wire you money, the last thing you want is a multi-week delay for a corporate conversion. Start with the end in mind.

The Core Components of Your Articles of Incorporation

Your lawyer or a service like Clerky or Stripe Atlas will handle the filing, but you need to understand the substance of what you're signing.

1. Corporate Name

This is your company's legal name. It must include a corporate designator like "Inc.", "Corporation", or "Co."

Tactical Check #1 - State Uniqueness: Before filing, you must ensure the name isn't already taken in Delaware. Your lawyer or filing platform does this by checking the Delaware Division of Corporations database. · Tactical Check #2 - Trademark Risk: A bigger mistake is choosing a name that's available in Delaware but is already trademarked by another company in your industry. A state name check does not check for trademark conflicts. Use the USPTO's TESS database to do a preliminary search and consider a more formal trademark search to avoid a forced, expensive rebranding later.

2. Registered Agent

The Registered Agent is your company's official point of contact in Delaware for all legal and government correspondence, including lawsuits and tax notices. It cannot be a P.O. box.

The Rule: Don't act as your own registered agent. Your home address would become public record, and you'd have to be available during business hours. · The Action: Use a professional registered agent service. It's a standard part of any incorporation package from a lawyer or a platform like Stripe Atlas. The cost is typically $100-$300 per year and is a non-negotiable cost of doing business.

3. Business Purpose

What is the company's purpose? While you might be tempted to write a lofty mission statement, don't. The standard, investor-approved language is a generic clause that allows your company to do anything legal.

It usually reads something like: "The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware."

Using this language prevents you from ever being legally constrained if you pivot your business model.

4. Authorized Shares & Par Value: The Most Important Part

This is the part with the most leverage to get wrong. Your Articles must state the total number of shares the corporation is authorized to issue in the future.

Authorized Shares

This is not the number of shares you own—it's the total available pool of stock the company can issue across founders, employees (the option pool), and investors.

The Gold Standard: Authorize 10,000,000 or 15,000,000 shares of Common Stock. · Why this many? A large number of shares allows for granular and psychologically pleasing equity grants. It simply feels better to grant an early employee 100,000 options out of a 10 million share pool (1%) than 100 out of 10,000. It also provides plenty of room for future fundraising rounds without needing to amend your charter to authorize more shares (which requires board and shareholder votes).

Par Value

Par value is an archaic concept representing the minimum legal price for a share. Your goal is to set this as low as possible.

The Gold Standard: Set par value at $0.00001 per share. · Why so low? When you issue founder shares, you must legally pay the company for them. This purchase price is the par value multiplied by your number of shares.

Founder A (Does it right): Issues 8,000,000 shares to themselves at $0.00001 par value. Total purchase price: $80. She can write a personal check for this.

Founder B (Makes a mistake): Sets par value at $0.01. To issue 8,000,000 shares, he must legally pay the company $80,000. If he can't, the shares aren't validly issued, a catastrophic failure that will be caught during investor due diligence. Even if he can, purchasing the shares at a higher value can create tax complications when filing an 83(b) election.

5. Incorporator

This is simply the person or entity who signs and files the document. It's usually your lawyer or an authorized representative from your incorporation service. Their role is purely administrative and ends the moment the filing is complete.

The Job's Not Done: Critical Post-Incorporation Actions

Filing your Articles of Incorporation creates the company. Now you have to actually organize and operate it. A good legal-tech platform or law firm will guide you through these, but you are ultimately responsible.

Hold the Organizational Meeting: Your initial Board of Directors (likely just you, or you and your co-founders) must meet to formally approve the next steps. This is often done via a Unanimous Written Consent. · Adopt Bylaws: These are the internal rules for governing your company (how the board votes, roles of officers, etc.). Your lawyer will provide a standard set. · Appoint Officers: Your board will formally appoint the company's officers (e.g., CEO, President, Secretary, Treasurer). Early on, one founder often holds all these titles. · Issue Founder Stock: The board authorizes the issuance of the initial shares to the founders, subject to vesting schedules. This is documented in a Stock Purchase Agreement. · FILE YOUR 83(b) ELECTION: This is not optional. If your shares are subject to vesting, you have exactly 30 days from the date of the grant to file a Section 83(b) election with the IRS. This tells the IRS you want to be taxed on the value of your stock today (when it's virtually worthless) rather than as it vests (when it could be worth millions). Failing to file is one of the most devastating and costly mistakes a founder can make. · Open a Corporate Bank Account: You need to keep company finances separate from your own. You'll need your Articles and an EIN (Employer Identification Number) from the IRS to do this. · Assign Intellectual Property: You and all other team members must sign agreements (like a CIIAA) assigning all relevant intellectual property created for the startup to the corporation. If you don't, the company doesn't actually own its own code, designs, or content.

How to Apply This This Week

Decide on your path: Will you use a platform like Clerky or Stripe Atlas, or hire a startup lawyer? For a first-time founder, a lawyer (even just for a one-hour consultation) can provide valuable guardrails. · Perform name checks: Spend 30 minutes searching the Delaware corporations database and the USPTO TESS database for your proposed company name. · Align with co-founders: If you have co-founders, agree on the equity split and vesting schedule before you incorporate. These terms will go into the stock purchase agreements you sign immediately after formation. · Prepare your checkbook (for a small amount): Be ready to pay the Delaware filing fees and first-year registered agent fee (around $400-$500 total) and write a personal check to the company for your shares at par value (e.g., $50-$100).