New York Purpose Statement
When the New York Department of State rejects a purpose statement for the Certificate (Articles) of Incorporation, it usually uses the following verbiage: “The Not-for-Profit Corporation Law requires corporations to provide specific purpose(s). The purpose(s) set forth in the proposed certificate are unacceptably vague and must be clarified. Please review the following list of helpful tips when drafting your purposes(s): “Do Not: – Do not use the phrase “including but not limited to” when describing the purpose. – Do not state vague and general purposes. – Do not state the routine activities and powers the corporation will carry out in furtherance of its purposes (e.g., owning property). “Do: – Clearly and fully describe the purpose of the corporation. – Describe what the corporation will do to carry out its purpose. – A concise description of the corporation’s purpose is sufficient. Consider the following four elements when drafting the purpose paragraph:
- WHY – is the corporation being formed?
- WHAT – does the corporation intend on accomplishing?
- HOW – will the corporation accomplish these purposes?
- WHO – will benefit from these purposes?”