Articles of Incorporation

The articles of incorporation are the document that formally establishes a company.

In the context of notarial practice, it is not simply a form to be filled out, but the document through which the shareholders give legal form to the business venture, specify the essential elements of the company, and make the initial decisions regarding its organization.

The articles of incorporation typically include items such as:

• • • • • • • company name;
            • headquarters;
            • corporate purpose;
            • share capital;
            • contributions;
            • members;
            • ownership stakes;
            • administration;
            • Initial operating rules.

For companies that require the services of a notary, the articles of incorporation are drawn up as a public deed, which is a necessary step for subsequent registration in the Business Registry.

A certificate of incorporation and articles of incorporation are not the same thing

The articles of incorporation and the bylaws are often mentioned together.

The articles of incorporation set forth the shareholders’ intent to form the corporation and the essential elements for the corporation’s formation.

The articles of incorporation, on the other hand, contain the rules that will govern the company’s operations over time.

In practice, the two elements may be contained in the same document or be closely related, but they serve different functions.

This distinction becomes particularly important when comparing an ordinary limited liability company (SRL) and a simplified limited liability company (SRLS): in an ordinary SRL, there is greater flexibility to establish customized rules, whereas in an SRLS, the articles of incorporation must conform to the standard template provided by law.

Example

Two partners plan to start a company.

The articles of incorporation serve to formally establish the company, specifying who the shareholders are, their capital contributions, their shareholdings, and the nature of the company’s business.

The articles of incorporation, on the other hand, serve to establish how that company will operate: who makes decisions, with what majorities, how shares may be transferred, and what rules will govern the company’s operations.

The human side

The articles of incorporation are often perceived as the moment of signing.

In fact, there is a more important step before signing: understanding what is being built.

A well-drafted articles of incorporation not only serves to establish a company, but also to prevent doubts, unspoken expectations, or unclear rules from becoming problems over time.

This is the point at which a business venture ceases to be just an idea and becomes a legal entity.

Related Insight

To understand why the articles of incorporation are key to choosing between an SRL and an SRLS, you can also read: SRL or SRLS: Differences to Know Before Starting a Company.

To learn more about the process of incorporating a company, you can also consult the section dedicated to company incorporations.