What is a certificate of incorporation?

TLDR: The certificate of incorporation is the constitutional document of a company and establishes many of the critical rights and attributes of a company.

The two main governing documents of a corporation are its charter (called the “certificate of incorporation” in Delaware and the “articles of incorporation” in California) and its bylaws.

The charter is the document that formally and officially commences the existence of a corporation upon its filing with Secretary of State, or other state company registrar, in the state of incorporation.

In Delaware, the certificate of incorporation must include the following information:

• the name of the corporation;
• a statement of business purpose;
• the address of the corporation’s registered office in the State of Delaware and the name of the registered agent at such address for service of process;
• the total number of shares of stock the corporation is authorized to issue and a description of the different classes of stock (if there is more than one class); and
• for the initial filing, the name and address of the corporation’s incorporator.

In general, any changes or amendments to the certificate of incorporation must be approved by the board of directors and the stockholder of the corporation and filed with the Secretary of State. In start-up companies, the certificate of incorporation is most often amended in the context of a financing event to create additional classes of stock for new investors and to establish the rights and preferences of such stock.

Careful observance of a corporation’s charter is a key element of good corporate governance. Acting in violation of a corporation’s charter can render such actions invalid.

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