A corporation is managed by its board of directors, which must approve major business
decisions. A director can be, but is not required to be, either a shareholder or
an officer. Just as representatives in Congress are elected by voters, directors are elected by the shareholders
and typically serve for a limited term. Each corporation must have at least one
Examples of procedures which must be approved by the board of directors include:
Declaring a dividend
Electing officers and setting the terms of their employment
Amending bylaws or the articles of incorporation
Any corporate mergers, reorganizations or other significant corporate transactions
Directors of a corporation owe "duties of loyalty and care" to the corporation.
Generally, this means the directors must act in good faith, with reasonable care,
and in the best interest of the corporation. If a director stands to personally
gain from a transaction with the corporation, he or she must disclose this fact and
refrain from voting on the matter, if possible.
To learn more and to speak with a representative, please call us at (888) 381-8758.