In California, a corporation is formed by filing the articles of incorporation with the Secretary of State. The incorporators may either file the articles of incorporation by using the form articles of incorporation developed by the Secretary of State, or they can draft their own articles of incorporation with specific provisions. The second option is common for corporations with complex organizational and financial structures. The articles of incorporation filed with the Secretary of State must contain all the information required by Section 202 of California Corporations Code.
The Articles of Incorporation Must State the Name of the Corporation
First of all, the articles of incorporation must state the name of the corporation. Corps. C. § 202(a). The name of the corporation cannot be the same as or closely resemble the name of a domestic corporation or a name of a foreign corporation qualified to do business in California. Id. 201(b). Before filing the articles of incorporation the incorporators should conduct a research on the website of the Secretary of State to see if the particular name is available or not. The incorporators also have the option to reserve a particular name before filing the articles of incorporation.
The Articles of Incorporation Must Include a Statement of Corporate Purpose
The California Corporations Code requires the incorporators to include a statement of corporate purpose in the articles of organization. To form an ordinary business corporation the articles of incorporation must state that “[t]hat the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code.” Id. § 202(b)(1)(A). The California Corporations Code has specific requirements for professional corporations, corporations subject to the Banking Law and corporations subject to the Insurance Code.
The Articles of Incorporation Must Designate the Agent for Service of Process
The articles of incorporation must include the name and the address of the corporation’s initial agent for service of process. Id. § 202(c). The address of the agent for service of process shall be in the State of California. Both individuals and corporations can serve as agents for service of process. Corporations can serve as agents for service of process only if they are registered by the Secretary of State as corporations with such authority.
The Articles of Incorporation Must Include the Initial Street and Mailing Address of the Corporation
The articles of incorporation shall state the initial street address of the corporation. Id. § 202(d). The incorporators cannot list a P.O. Box as a street address of the corporation. The articles of incorporation shall also include the initial mailing address of the corporation. Id. § 202(e). The incorporators do not have to state a mailing address if it is the same as the street address of the corporation.
The Articles of Incorporation Must Include the Share Structure of the Corporation
The articles of incorporation shall also specify the share structure of the corporation. If the corporation is authorized to issue only one class of shares the articles of incorporation must state the total number of shares that the corporation is authorized to issue. Id. § 202(f). If the corporation will issue more than one class of shares or if any class will have two or more series, the articles of incorporation must state:
1) “The total number of shares of each class the corporation is authorized to issue, and the total number of shares of each series which the corporation is authorized to issue or that the board is authorized to fix the number of shares of any such series;
2) The designation of each class, and the designation of each series or that the board may determine the designation of any such series; and
3) The rights, preferences, privileges, and restrictions granted to or imposed upon the respective classes or series of shares or the holders thereof, or that the board, within any limits and restrictions stated, may determine or alter the rights, preferences, privileges, and restrictions granted to or imposed upon any wholly unissued class of shares or any wholly unissued series of any class of shares….” Id. § 202(g).
The articles of incorporation must include all the above mentioned information in order to be complete. The form articles of incorporations developed by the Secretary of State include all the required information. However, in some cases the incorporators will have to draft their own articles of incorporations because the forms do not contain specific provisions for some situations described in the Section 202 of California Corporations Code.
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