What is a project charter and why is it important?

A project charter is a document issued by the project sponsor that formally authorizes the existence of the project and gives the project manager authority to apply organizational resources. It includes the project purpose, measurable objectives, high-level requirements, assumptions and constraints, summary milestones, overall budget, key stakeholders, and the assigned project manager with their authority level. The charter is created during the initiating process group and is important because without it, the project has no formal authorization.