Business Charter Definition

A business charter, also known as articles of incorporation, establishes the life of a corporation. The charter contains information concerning the corporation's purpose, the structure of its shares of stock, and details about the internal organization.

  1. Purpose

    • An incorporated business is a separate legal entity from its shareholders and directors. Its existence is created by the corporation's charter. The business charter is a public document that is put into effect by its corporation commission.

    Application

    • The corporation's incorporators apply for the charter at the appropriate state office, usually the secretary of state. The corporation comes into existence when the state approves the application for the charter.

    Description

    • A charter must contain at least the minimum provisions required by state statutes. These specifications typically include: the corporate name and address; names of incorporators; purpose and duration of the corporation; and the organizational and capital structure.

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