Reviewed by Sep 30, 2020| Updated on
Charters are legal documents that legally set up corporate companies. Only national and regional governments are authorised to issue charters. For a company to be chartered, they must have established themselves as partnerships, sole proprietorship, or any other similar structures.
Most of the charters contain the company's name, head offices' registered address, the date on which it was incorporated, the number of stocks and its types to be issued, and any limitations on their business activities.
Charters are documents that bind a company's objectives and goals, be it non-profit or for-profit status, full registered name, and location of the company's representative. The authorised representative is the individual who can legally sign and accept documents on the company's behalf.
Apart from that, charters also contain information about the assets that a company owns, the composition of the board and the structure of the ownership.
The companies are supposed to apply for charters in the region where they have their headquarters registered. However, they can have their main operation hub elsewhere, and there are no restrictions on that.
Nevertheless, charters will only have the details of the registered office only. The enterprises have to pay a fee for the charting to the respective states and are also charged taxes for the franchise.
Enterprises should file their charters prior to making business transactions as an entity. If they fail to do so, owners will be exposed to personally taking up debts, damages, and any other liabilities.
The founders of businesses can oversee charter and set up their companies, make and file for charters, and monitor the preparation of other requisite documents. The founder or incorporator can also go onto selecting the board members of the company's directory and hold the initial meetings.
Apart from these, the incorporator of the enterprise has no other official duties. The official agent of the company will be in place to receive all legal documents on behalf of the company.