The board of directors manages the corporation and chooses the officers President, Vice President, Secretary and Treasurer, whose responsibility it is to run the day to day operations of the corporation.
How many Directors, Shareholders and Officers does a corporation need?
Most States allow one individual to hold all offices, this is called a close corporation.
Can the same person be the sole Shareholder and Director?
Most States require that there be at least one director and two officers for a corporation. The required officers are President and Secretary. Most States allow one individual to hold both offices and be the sole director of the corporation. Usually, that one person may also be the sole shareholder. A corporation may not be a director of another corporation.
While most jurisdictions allow the same person to act in all capacities, that person has different responsibilities depending on the capacity in which he is acting.
- Vice President
The President is typically responsible for entering into contracts on behalf of the corporation, the Treasurer is responsible for maintaining and accounting for corporate funds, and the Secretary is responsible for observing corporate formalities and maintaining corporate records.
In addition to these required officer positions, a corporation may also have vice presidents and assistant secretaries or assistant treasurers.
Typically, the authority and responsibilities of each officer is described in the corporate bylaws and may be further defined by an employment contract or job description.
The President has the overall executive responsibility for the management of the corporation and is directly responsible for carrying out the orders of the board of directors.
The Treasurer is the chief financial officer of the corporation and is responsible for controlling and recording its finances and maintaining corporate bank accounts.
The Secretary is typically responsible for maintaining the corporate records.
The Board of Directors is the management body for the corporation. Responsibilities of the Board of Directors include establishing business policies and approving major contracts. In addition, the Board may also elect the President. Ordinary business practices of the corporation are carried out by the officers and employees under the directives and supervision of these Directors.
The first meeting of the Board of Directors is important because the bylaws, the corporate seal, stock certificates and record books are adopted.