What Are Articles of Amendment and When Should Businesses Use Them?
You’ve just started your business and you’re ready to make it official. But what documents do you need to file to get things rolling? To establish a corporation, the process usually requires filing Articles of Incorporation with the state. But what happens when it comes time to make changes to those articles? That’s where Articles of Amendment come in. Read on for more information about when businesses should use Articles of Amendment and why they are important.
What Are Articles of Amendment?
Articles of Amendment are legal documents that are used to make changes—or amendments—to the original Articles of Incorporation filed with the state. They allow business owners to legally change certain aspects of their company, such as its name or the number of shares it can issue. Depending on the type and size of your business, there may be other aspects that can be amended as well.
When Should Businesses File Articles of Amendment?
Business owners should file Articles of Amendment when they want to make changes to their company that were not included in their original articles. This could include changing the company’s name, increasing or decreasing the number or types of shares, changing directors or officers, or adding or removing restrictions on corporate activities. It is important to note that while some states require businesses to file an amendment if they make certain types of changes (such as changing the name), other states may not require any filings at all if those same changes are made. Therefore, it is important for business owners to check with their state’s Secretary of State office before making any changes that could necessitate an amendment filing.
Why Are Amendments Necessary?
Simply put, without an amendment filing, certain changes may not be legally binding — meaning they will not have any effect on your business operations until you properly amend your articles with the state government agency responsible for overseeing corporations in your state (usually called Secretary of State). Filing an amendment also ensures that potential customers and partners know who is behind your business so they can trust who they are doing business with. Furthermore, a properly filed amendment serves as a record so future entities know who owned and operated a particular company during different points in time — this includes courts if there is ever litigation involving a particular entity down the road.
Understanding when and why you need to file Articles of Amendment is key for any successful business owner who wants their operations to remain legally compliant in all jurisdictions where their corporation does business. While some changes may seem minor enough that no filing would be necessary, consulting a qualified attorney before making any major decisions regarding your corporate structure is always recommended — it can save you time and money later down the line!
Law 4 Small Business (L4SB). A little law now can save a lot later. A Slingshot company.
