What is a Corporate Charter

Corporate charter is the funding document, related to ongoing and established financial functions of any corporation. In several countries the charter comes under the jurisdiction of its government that has been empowered to register and authorize the establishment of that particular business. A corporate charter is not the single document but the collection of relevant documents based on the necessary requirements to comply with local laws. In broad sense, a corporate charter actually explains the purpose of developing the corporation. It explains the fact that in what type of industry the corporation will deal in and what is actually the type of the corporation. It depends on the detail explanation of this information that what type of regulations and law will be directly applicable to the present operation of the corporation.

Features of the charter:

A corporate charter generally has the following basic features:

  • It includes the intended name of the business.
  • The charter will also include the names of the selected persons to serve the preliminary board of directors.
  • In the charter the address of the principal location of the corporation will be clearly mentioned.
  • It will also include the name of the registered agent of the corporation.

The registered agent is the person who is supposed to accept the service of any petition or summons on behalf of the registered corporation, if it goes prosecuted.

When to prepare the charter:

It is recommended to plan a corporate charter and file it before the corporation transacts a business lawfully. There are a few people who ignore the importance of filing corporate charter. However, they should know the negative impacts of their negligence. If the person fails to file the charter before starting the operation he or she will be liable only to compensate any loss or cash crunch in near future. Personal liability will also include any kind of damages be it fire damage or natural calamity affecting your business. Until and unless one files up the charter he or she will not have the provision to demand a single buck from any authority.


Filing a charter to start a new endeavor is mandatory to avoid several business related complexities. At the same time it is imperative to amend the charter or the article over time. Amendment is a must when the owners decide to bring certain changes in the mode of business. If the corporation includes changes in its stocks and security factors then also it will be important to amend the charter and mention the present information in it. There are few countries that demand amendment in the charter of a company if it changes the name of the candidates who were previously serving its board of directors.

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