Certificate of Incorporation

A Certificate of Incorporation is the document that evidences a corporation’s incorporation with the Secretary of State in a particular state. By incorporating and obtaining a Certificate of Incorporation, the corporate entity comes into being for legal purposes.

That said, even prior to obtaining the Certificate of Incorporation there may very well have been activities undertaken by the principals of the future corporation that would be considered “corporate acts.” To be sure, the law provides for such scenarios where a “corporate promoter” engages in activities that would later be deemed to bind the corporation rather than the individual that originally conducted the activity. Corporate promoters typically solicit investment for the corporation that has not yet been formed, and the agreements they sign in order to garner investment can later obligate the corporation instead of the individual. This is important because one of the major tenets of corporate law is that corporate liability does not extend to the owners of the corporation. That said, corporate promoters can only remove their own liability after the fact and once the corporation is formed, i.e. once the Certificate of Incorporation has issued.

A Certificate of Incorporation is typically issued by the Secretary of State in the state in which the promoters of the corporation seek to incorporate. One of the typical realities of incorporation in any given state is that the corporation must consent to the secretary of state as the designated agent for service of process. This means that if a corporation is sued they can be served through the secretary of state in a given state, regardless of whether the corporation would prefer to be personally served at their headquarters or corporate office. Nevertheless, it is important to bear in the mind the specific corporate laws of a given state, as they do vary with respect to service of process. For example, in California service of process on the Secretary of State must be completed only as a last resort, and after reasonable efforts have been made to serve the corporation directly. In New York, on the other hand, service of process can be made on the Secretary of State without having made prior efforts to directly serve the corporation.

In short, there are a number of implications relating to the issuance of a Certificate of Incorporation, and nascent corporations should be mindful of these implications when deciding upon an entity type and organizing a company.