How is a Corporation Organized and Managed?

A Corporation has 3 levels: it is owned by Shareholders, who elect Directors (known as the “Board of Directors”), who appoint officers (CEO/President, Treasurer/CFO, Secretary, etc.) to run the day-to-day activities of the company. The Corporate Bylaws (that are adopted when the company is first organized and can be amended later) will specify how Directors can be elected or removed and how Officers are appointed or removed. Typically, this is done by a simple majority vote.

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In many cases, especially in small businesses, one person is all of the above: sole Shareholder, sole Director and all of the Officers. However, the company still maintains the flexibility to add Shareholders, Directors or Officers at any point in the future.