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What is a Charter?
In the corporate law context, the charter document of a company is the document filed with a state’s secretary of state in order to form a corporation or limited liability company. Derived from the English royal charters where the crown would grant individuals the right to incorporate for a particular purpose, charters are now based on state statutes that grant the authority to do business as a separate entity.
Charters typically contain, among other items, a corporation’s name, a corporation’s purpose, the number of shares of stock that the corporation is authorized to issue, the name and address of the incorporator, the size of the board of directors, the names and addresses of the directors, and any language eliminating or limiting the personal liability of a director for breach of fiduciary duties.
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