Duties of Corporate People

Duties of Corporate People

Tara Marlow

BUS 670: Legal Environment of Business

Professor Alisa Moore

November 29, 2010

Corporations

Corporations are legal organizations licensed by the state to carry out day to day business operations. Corporations are generally made of directors, officers, and shareholders; each of these groups has various functions within the governing body of corporations. The corporate structure is designed to operate in the best interest of shareholders. The directors and officers are often governed by a board of directors which utilizes the law to ensure the legal duties of the shareholders are fulfilled.

A corporation has legal rights and duties to conduct business through authorized representatives (Mallor, Barnes, Bowers, Langvardt, 2010). Shareholders elect directors and directors appoint officers. Corporations should have at least one director; whose job is to make the general business decisions. These decisions are enforced by the officers to carry out the objectives of the corporation’s shareholders.

Shareholder

Shareholders are individuals within an institution that legally owns one or more shares in a public or closed corporation. Shareholders own shares but not the corporation and possess various privileges. Shareholders may sell their shares if there is a buyer, vote for directors nominated by the board or themselves, and remaining assets after a corporation has liquidated.

Shareholders can have a direct or indirect interest within a business. Suppliers, customers, laborers, and the community are often considered shareholders because they are impacted by or have a vested interest within the corporation. A corporation’s shareholders have an ownership interest in the company by having invested in the corporation. The shareholders are the investors who receive ownership in the corporation in return for the money or assets they invest. Corporations are generally required by law to hold annual shareholder meetings...