Who are the groups involved in a corporation?
There are three key groups involved in a corporation: shareholders, directors andofficers.
Shareholders.
Shareholders (also known as stockholders) are the owners of the corporation. Each shareholder has rights to do or have one or more of the following:
- receive dividends;
- vote for directors; and
- the assets left over after the corporation is liquidated.
The different “classes” of stock define what rights a shareholder has. There can be one shareholder, thousands or millions.
Directors.
Directors are the people who make “policy” decisions for the corporation. They are elected by the shareholders (at the annual shareholder meeting) to serve terms typically between 1 and 3 years. Usually there are between 1 and 9 members of the board. They have regular meetings to review the business of the corporation and to make decisions about that business. The Board of Directors also elects the officers of the corporation.
Officers.
The officers of the corporation manage the day-to-day business of the corporation. The officers include the president, vice-presidents, secretary, treasurer, chief executive officer (CEO), chief operating officer (COO). No particular officers are required in Florida. Each officer has the responsibilities described in the bylaws of the corporation (described below). Most often, the secretary keeps the record books of the corporation and the treasurer is responsible for the corporation’s accounts. The president or chief executive officer is the highest ranking officer in the corporation and reports to the board.
In small business corporations(usually called closely held corporations or close corporations), a few people (or one) may fill all of the roles. A single person could be the shareholder, only director, officer and employee of the corporation. This is entirely permissible and doesn’t cause the loss of limited liability.