Corporate Charter - Definition and Explanation
Written by Jason Gordon
Updated at July 1st, 2021
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
-
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
- Courses
Back To: BUSINESS ENTITIES, CORPORATE GOVERNANCE, & OWNERSHIP
Charter Definition
A charter is a legal document authorized by a state to recognize the creation of a corporate business entity. Some states issue a Certificate of incorporation, rather than a charter. The charter generally bears the seal of the state of organization, the name of the company, its entity designation (such as Inc., Ltd, Corp.), for-profit or non-profit status, and the date of incorporation.
A Little More on What is a Corporate Charter
Incorporating a business generally begins with filing the appropriate forms with the secretary of states office in the state of incorporation. This application generally requires the following information:
- Business name;
- Entity designation;
- Business purpose (or statement of any lawful purpose);
- For-profit or non-profit status;
- Principal address;
- Name and address of registered agent;
- Types of shares being issued (if a for-profit entity);
- Par value of common shares; and
- Any specific governance restrictions (such as board composition, governance procedures, shareholder voting rights, etc.)
Any information recorded in the application concerning the entity's characteristics will generally be indicated in the charter, once approved and accepted by the secretary of states office.