Corporate Formation

Historically, corporations were created by special charter of governments. Today, corporations are usually registered with the state, province, or national government and become regulated by the laws enacted by that government. Registration is the main prerequisite to the corporation's assumption of limited liability. As part of this registration, it must in many cases be required to designate the principal address of the corporation as well as a registered agent (a person or company that is designated to receive legal service of process). As part of the registration, it may also be required to designate an agent or other legal representative of the corporation depending on the filing jurisdiction. 

Generally, a corporation files articles of incorporation with the government, laying out the general nature of the corporation, the amount of stock it is authorized to issue, and the names and addresses of directors. Once the articles are approved, the corporation's directors meet to create bylaws that govern the internal functions of the corporation, such as meeting procedures and officer positions. 

The law of the jurisdiction in which a corporation operates will regulate most of its internal activities, as well as its finances. If a corporation operates outside its home state, it is often required to register with other governments as a foreign corporation, and is almost always subject to laws of its host state pertaining to employment, crimes, contracts, civil actions, and the like. 

Corporate Name

Corporations generally have a distinct name. Historically, some corporations were named after their membership: for instance, "The President and Fellows of Harvard College." Nowadays, corporations in most jurisdictions have a distinct name that does not need to make reference to their membership. In Canada, this possibility is taken to its logical extreme: many smaller Canadian corporations have no names at all, merely numbers based on their Provincial Sales Tax registration number (e.g., " Ontario Limited"). 

In most countries, corporate names include the term "Corporation", or an abbreviation that denotes the corporate status of the entity. Of course, these terms vary by jurisdiction and language. In some jurisdictions they are mandatory, and in others they are not.[5] Their use puts all persons on constructive notice that they have to deal with an entity whose liability remains limited, in the sense that it does not reach back to the persons who constitute the entity; one can only collect from whatever assets the entity still controls at the time one obtains a judgment against it. 

Certain jurisdictions do not allow the use of the word "company" alone to denote corporate status, since the word "company" may refer to a partnership or to a sole proprietorship, or even, archaically, to a group of not necessarily related people (for example, those staying in a tavern). 

Articles of Incorporation 

The Articles of Incorporation (sometimes also referred to as the Certificate of Incorporation or the Corporate Charter) are the primary rules governing the management of a corporation, and are filed with a state or other regulatory agency.  A corporation's Articles of Incorporation generally provide information such as:

1. The corporation's name, which has to be unique from any other corporation in that jurisdiction. As part of the corporation's name, certain words such as "incorporated", "limited", "corporation", (or their abbreviations) or some equivalent term in countries whose language is not English, are usually required as part of the name as a "flag" to indicate to persons doing business with the organization that it is a corporation (with limited liability) as opposed to an individual or partnership (with unlimited liability). In some cases, certain types of names are prohibited except by special permission, such as words implying the corporation is a government agency or has powers to act in ways it is not otherwise allowed.
2. The name of the person(s) organizing the corporation (the Incorporator).
3. Whether the corporation is a stock corporation or a non-stock corporation.
4. Whether the corporation's existence is permanent or limited for a specific period of time. Generally the rule is that a corporation existence is forever, or until (1) it stops paying the yearly corporate renewal fees or otherwise fails to do something required to continue its existence such as file certain paperwork each year; or (2) it files a request to "wind up and dissolve."
5. In some cases, a corporation must state the purposes for which it is formed. Some jurisdictions permit a general statement such as "any lawful purpose" but some require explicit specifications.
6. If a non-stock corporation, whether it is for profit or non-profit. However, some jurisdictions differentiate by "for profit" or "non profit" and some by "stock or non-stock".
7. In the United States, if a corporation is to be organized as a non-profit, to be recognized as such by the Internal Revenue Service, such as for eligibility for tax exemption, certain specific wording must be included stating no part of the assets of the corporation are to benefit the members.
8. If a stock corporation, the number of shares the corporation is authorized to issue, or the maximum amount in a specific currency of stock that may be issued, e.g. a maximum of $25,000.
9. The number and names of the corporation's initial Board of Directors (though this is optional in most cases).
10. The initial director(s) of the corporation (in some cases the incorporator or the registered agent must be a director, if not an attorney or another corporation).
    The location of the corporation's "registered office" - the location at which legal papers can be served to the corporation if necessary. Some states further require the designation of a Registered Agent: a person to whom such papers could be delivered.
11. Most states permit a corporation to be formed by one person; in some cases (such as non-profit corporations) it may require three or five or more. This change has come about as a result of Delaware liberalizing its corporation rules to allow corporations to be formed by one person, and states not wanting to lose corporate charters to Delaware had to revise their rules as a result.

Articles of Incorporation vary widely from corporation to corporation, and from jurisdiction to jurisdiction, but generally do not go into great detail about a corporation's operations, which are spelled out in more detail in a company's By-Laws.

Bylaws

A bylaw is a rule governing the internal management of an organization, such as a business corporation.  Bylaws cannot countermand governmental law.  In a business situation, bylaws are drafted by a corporation's founders or directors under the authority of its Charter or Articles of Incorporation. Bylaws widely vary from organization to organization, but generally cover topics such as how directors are elected, how meetings of directors (and in the case of a business, shareholders) are conducted, and what officers the organization will have and a description of their duties.  Bylaws generally cannot be amended by an organization without board and/or shareholder approval.

In parliamentary procedure, particularly Robert's Rules of Order, the bylaws are generally the supreme governing document of an organization, superseded only by the charter of an incorporated society. The bylaws contain the most fundamental principles and rules regarding the nature of the organization. It was once common practice for organizations to have two separate governing documents, a constitution and bylaws, but this has fallen out of favor because of the ease of use, increased clarity, and reduced chance of conflict inherent in a single, unified document. This single document, while properly referred to as the bylaws, is often referred to as a constitution or a constitution and bylaws. Unless otherwise provided by law, the organization does not formally exist until bylaws have been adopted.

Stock

Stock is the capital raised by a corporation or joint-stock company through the issuance and distribution of shares. A person or organization that holds at least a partial share of stock is called a shareholder. The aggregate value of a corporation's issued shares is its market capitalization.  There are different types of stock as outlined below.

Common Stock

Common stock, also referred to as common or ordinary shares, are, as the name implies, the most usual and commonly held form of stock in a corporation. The other type of shares that the public can hold in a corporation is known as preferred stock. Common stock that has been re-purchased by the corporation is known as treasury stock and is available for a variety of corporate uses.  Common stock typically has voting rights in corporate decision matters, though perhaps different rights from preferred stock. In order of priority in a liquidation of a corporation, the owners of common stock are near the last. Dividends paid to the stockholders must be paid to preferred shares before being paid to common stock shareholders. 

Preferred Stock

Preferred stock, sometimes called preferred shares, have priority over common stock in the distribution of dividends and assets.  Most preferred shares provide no voting rights in corporate decision matters. However, some preferred shares have special voting rights to approve certain extraordinary events (such as the issuance of new shares, or the approval of the acquisition of the company), or to elect directors.

Treasury Stock

Treasury stock are shares that have been bought back from public. Treasury Stock is considered issued, but not outstanding.

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