Charter
Accounting glossary · Understand, connect, apply
A corporate charter is a governing document that establishes a corporation and sets out key legal characteristics, such as authorized share classes.
Example
A corporation’s charter authorizes common shares and a class of preferred shares.
Remember the difference
Names and filing requirements vary by jurisdiction. A charter is distinct from internal bylaws and a partnership agreement.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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