If you are just starting a corporation, once you’ve submitted your Articles of Incorporation, it’s time to assign the various roles within your company. Most corporations have a standard group of important stakeholders who help make decisions about the scope and direction of the corporation. Unlike some other types of corporate structures, a corporation has a team of individuals who work together to help drive the organization to its highest potential.
Within a corporation, the main people of importance are the board of directions, the corporate officers and finally, the shareholders. Each group of individuals has a particular purpose and job within the company. As your corporation begins to take shape, you can appoint the most talented and knowledgeable individuals to these roles in order to give your business the best advantage as it begins.
Board of Directors
Your team of the best and the brightest should begin with the board of directors. When a person chooses to incorporate, one of the required steps is to assign a board of directors to the company. This initial group of people may be chosen by the primary owner in the beginning of the life of the corporation. Later as a company expands, the board can be elected by a group of shareholders.
When a company is first starting out, the board of directors has a large agenda that needs to be addressed. First, the corporate bylaws must be reviewed and ratified. Additionally, all of the standard operating procedures must be created and agreed upon at the first board of directors meeting. After the startup phase, the board is responsible for attending all periodic meetings of its directors for the life of the company, approving any major changes within the company, including management, contracts, or scopes of business, making changes to the corporate bylaws and working in the best interest of the corporation in all matters for the future.
Officers in the Corporation
The next group of important people within the framework of a corporation is its officers. These are the people who are involved in the company beyond the routine board meetings. Officers hold leadership roles in the everyday operations and management of the company. They are the individuals who make the biggest decisions when it comes to the path of the organization. In most cases, the board of directors selects the corporate officers. Many corporations have individuals in the following roles:
- Chief Executive Officer: The CEO is the representative leader of the corporation. This person, who must answer to the board of directors, takes on the task of being the head of the company.
- Chief Operating Officer: The COO’s focus is on company operations. This person works alongside the CEO to manage daily tasks.
- Chief Financial Officer: The CFO is in charge of the corporation’s budget and works to make sure all of the finances balance properly in the company.
- Secretary: This individual records all important business decisions during board or shareholder meetings.
The final group of important individuals in a corporation’s initial creation consists of shareholders. Shareholders are a group of people who hold pieces of ownership in a company. For a corporation, shareholders may have been given stock because of their support of the company. Usually when someone invests in a corporation, they are rewarded with stock in the company. These individuals typically participate in shareholder meetings where major decisions about the direction of the corporation can be made. Usually the largest shareholders are the people who initially started the corporation, with other shareholders having various percentages of ownership depending on their contribution to the business.
The evolution of a corporation can be further cemented in success if the right people are appointed to the most important jobs. From the board of directors, to the officers, to the shareholders, it’s vital to have the most suitable people for each job leading to a higher likelihood of triumph.
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