Corporate Charter Definition

A corporate charter is a legal document that establishes and defines a corporation, outlining its purpose, structure, and key operating principles, and it's typically filed with the state government to obtain legal recognition.

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What is a corporate charter?

A corporate charter is a company’s birth certificate. You file the corporate charter with the state to legally create your business. In most states, the corporate charter form asks for the following information: 

  • Business name
  • Legal entity type
  • Registered agent
  • Registered address
  • Purpose of the business
  • Names and signatures of organizers (if an LLC) or incorporators (if a corporation)
  • Signed statement by registered agent agreeing to act as the registered agent

If you’re forming a corporation, corporate charters need extra information. This includes the number and types of shares issued. They also ask whether the corporation is a for-profit corporation.

Corporate Charter Benefits

What are corporate charter benefits? We’re glad that you asked. Corporate charter advantages include things like:

  • Limiting liability
  • Saving money on taxes
  • Giving you control over your business’s legal entity type

If you don’t have a corporate charter, then the state may treat your business like a general partnership. Under a general partnership, the business owner may be on the hook for the business’s debts. 

Want to help protect yourself and your assets? Start on the right foot by using our ZenBusiness Formation Plans. Tell us some information about your business, and we will tailor a selection of business formation packages just for you. Pick one, pay the reasonable fee (plus the state filing fee), and you’re on the way to starting your business. 

Corporate Charter Considerations

When writing your corporate charter, here are some things to keep in mind:

  • The name of your business (and whether the name is available)
  • The type of business you would like to form
  • Who your business’s registered agent (For more information, please see our what is a registered agent page) will be 
  • Where you would like your business to receive its important legal documents
  • The type of ownership structure you would like your business to have
  • The products or services that you want your business to provide

Need help? We understand. The only corporate charter disadvantages are that it takes time and money to do research and go to an attorney’s office. Not everyone has time to go to an attorney’s office and fill out paperwork. That’s why we created our Business Formation Services. With our program, it’s easier than ever to file your business paperwork. Don’t wait. With our service, you can have your business paperwork filed in minutes.  

Other Names for a Corporate Charter

There are several alternative terms that fall within the corporate charter business definition. Other corporate charter examples include “charter” and “Articles of Incorporation.”

Here are other names for a corporate charter for types of businesses besides corporations:

  • Certificate of Limited Partnership (for a limited partnership)
  • Articles of Organization for a Limited Cooperative Association (for an LCA)
  • Articles of Organization (for a limited liability company)

Depending on where you are, the state may use different names to describe the definition of a corporate charter. 

Summary

On our journey, we learned that the corporate charter is like a business’s birth certificate and authorizes the business to legally operate. Things to consider when writing your corporate charter are whom you want to act as the registered agent and the legal entity type of your business. The corporate charter disadvantages are the upfront cost. The corporate charter advantages — like potentially paying less in taxes — may outweigh these disadvantages. 

We Can Help

We care about the success of every small business. We firmly believe that everyone deserves access to the tools to pursue their entrepreneurial dreams. Our Business Formation Services packages include everything that you need to start your small business — for a fraction of the cost of hiring an attorney.

Plus, our Worry-Free Compliance Service provides you with extra protection by keeping track of your filing deadlines. What’s more, you get up to two amendment filings each year included. What’re you waiting for? Let’s do this. 

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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Written by Team ZenBusiness

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