Corporate records, such as Articles of Incorporation and Annual Reports, can be a powerful tool to verify a company's existence and good standing, identify conflicts of interest, learn about a subject's potential wealth, or verify resume claims. Corporate records are filed with the state in which the company operates; most commonly with the Secretary of State, but another office may be responsible (such as the Corporations Commission). However, the corporate information available online and in person can vary greatly from state to state. Companies that operate in multiple states will have to register with each state, filing as a domestic company in the primary state of organization and as a foreign entity in each additional state; otherwise the company would be required to register a separate corporation in each state and separate all operations.
Articles of Incorporation can provide information detailing the following:
- The names of the original corporate officers.
- The purpose of the business.
- The number of shares of stock issued.
- The organizational status of the corporation (S Corporation or C Corporation).
- The for-profit or non-profit status of the corporation.
Click on the Articles of Incorporation provided below as an example of how information can be gathered from corporate documents.
One can learn that this specific company is an S Corporation with 10,000 shares of stock (meaning that the company does not pay income taxes but splits the profits between shareholders who then pay taxes on their earnings), the names of the members of the Board of Directors, and the main location of the business. In addition, the Articles of Incorporation also highlight the ambiguity that often is found in corporate records. Specifically, as these records show, it is common for a company's purpose to be listed as "all lawful activities or business permitted under the law."
Another common filing is the Annual Report, which can be used to identify who served as officers and directors of a business from year to year and to verify if the business is still in active existence.