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FAQ's
You no doubt have a question or two about corporations. You're not alone. Here are answers to many of the questions we're asked every day, followed by a convenient Dictionary of Terms:
What is a Corporation?
A corporation is a legal entity, separate from those who own it, and generally from those who manage it. When one's business corporation is sued, there are provisions in the law to protect owners (shareholders) and officers of that business corporation from personal liability (i.e. loss of one's personal home, car, bank accounts, etc.).
A corporation is created when articles of incorporation (charter or certificate of incorporation in certain states) are filed with the proscribed fees, and accepted by the proper state authority.
What is the structure of a corporation?
Stockholders own a corporation. While stockholders do not directly manage the corporation, they influence corporate decisions through indirect actions such as electing and removing directors, approving or disapproving amendments to the articles of incorporation, and voting on important corporate decisions.
The members of the Board of Directors are responsible for managing the affairs of the corporation. Usually, directors make only major business decisions, however they supervise and appoint officers who make the day-to-day business decisions of the corporation.
Officers are responsible for the everyday management of the corporation. Typically, officers are appointed directly by the Board of Directors. Officers are:
President - responsible for the implementation of the directives and orders of the Board of Directors. The president handles the day-to-day managerial business of the corporation and defers to the Board of Directors on matters of policy.
Secretary - responsible for the maintenance of corporate records.
Treasurer - responsible for the management of corporate bank accounts and funds. The Board of Directors dictates the actual policy.
A stockholder may serve on the Board of Directors and be an officer of the corporation. In fact, in most states, one person is enough to form a corporation, and that person can be the sole officer, director and stockholder. Posted from
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FAQ - Easter
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