A charter of a company, also known as a a corporate charter or articles of incorporation, is a legal document filed with a government authority (such as the Secretary of State in the U.S.) that formally establishes a company as a corporation
. It serves as the foundational legal instrument that grants the corporation the authority to exist and operate within a specific jurisdiction
. The charter outlines key aspects of the corporation, including:
- The company’s name and location
- Its purpose or objectives (whether for-profit or nonprofit)
- The corporate structure and governance (such as the board of directors and officers)
- The number and types of shares authorized to be issued
- Rights, powers, and responsibilities of the corporation
- Procedures for meetings, voting, and decision-making
- Names and addresses of founders, initial directors, and officers
The corporate charter acts like a constitution for the company, defining its organization, operations, and legal framework. It must be approved by the relevant state or governmental body before the company can legally transact business as a corporation
. Without a charter, the company’s owners risk personal liability for debts and damages incurred during unchartered operations
. In summary, the company charter is a formal, legal document that creates the corporation and sets out its essential rules, rights, and structure, providing a legal foundation and legitimacy for the business
