The shares of stock in a corporation represent a person's ownership interest in the corporation. The Articles of Incorporation must set forth the number of authorized shares, and the class or classes of shares. Other than this, the decision as to how many shares to authorize, and how many to issue, is one that depends upon how many owners there will be, and whether cash or other property will be used to pay for the shares. A corporation may not issue shares in an amount greater than what it is authorized to issue in its Articles of Incorporation. If a corporation changes its mind and wishes to issue more shares than the Articles of Incorporation allows, it may amend its Articles of Incorporation to permit additional shares to be issued.
Special rules apply to Close corporations.
Those rules are on the Articles of Incorporation form available from the Corporations Division. The corporate purpose may, but need not, be specified in the Articles of Incorporation. Unless the Articles of Incorporation limits the purpose of the corporation, the corporation will be authorized to engage in any lawful business. Some businesses are regulated by specific state agencies and require prior approval from those agencies before a corporation is formed. For example, banks, savings and loan associations, credit unions, other financial institutions, and insurance companies must be approved by the Department of Banking, Insurance, Securities, and Health Care Administration before a new corporation is formed.