Section Library
Advantages of Incorporation
Corporate status or recognition as a legal entity, in most cases, provides a liability shelter against individual financial responsibility for corporate officers and directors. Unincorporated groups, for instance, subject their members to the possible risk of personal liability for the activities of the cooperative.
The two necessary documents that regulate the operation of an incorporated trade or professional association are the Articles of Incorporation and the bylaws. Typical requirements for articles of incorporation are:
- The name of the corporation.
- The period of duration (usually perpetual).
- The purpose or purposes for which the corporation is organized.
- Any provisions, not inconsistent with law, which the incorporators elect to set forth in the articles of incorporation for the regulation of the internal affairs of the corporation, including any provisions for distribution of assets on dissolution or final liquidation.
- Address of its initial registered office and the name of its initial registered agent at such address.
- The number of directors constituting the initial board of directors, and the names and addresses of the persons who are to serve as the initial directors.
- Name and address of each incorporator.
Selection of a Place of Incorporation
Generally if the operations of the association are local and confined to the state where the association maintains its principal office, then that jurisdiction should be the place of incorporation.
Incorporation in a jurisdiction other than that in which the main offices of the association are maintained may involve qualifying in the state of operation as a "foreign corporation." AWWA international is incorporated in Illinois and licensed to do business in Colorado as a "foreign corporation."