Corporate Charter – Definition and Explanation

Cite this article as:"Corporate Charter – Definition and Explanation," in The Business Professor, updated January 25, 2020, last accessed October 20, 2020,


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 state’s 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 state’s office.

Reference for “Charter” › Managing Employees › Project Management

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