How is a corporation organized and managed?
There are three groups of individuals that are responsible for the organization and management of a corporation; officers, directors, and shareholders. Ownership – Corporations are owned by its shareholders. Shareholders do not manage or directly make decisions on behalf of the company. Typically, the more stock a shareholder owns the more voting power he/she has. Often shareholders vote on major corporate issues such as considering an amendment to the Articles of Incorporation, Mergers, and electing or removing directors. Overall management – Directors who are elected by the shareholders, are responsible for making major decisions. They are the ones who propose amendments and mergers. They also decide who the officers of the corporation will be. Corporate Officers – Officers of the corporation are hired by the Board of Directors. Officers such as the President/CEO, Treasurer/CFO, and Secretary are responsible for managing the day to day operations of the corporation.
