Basic structure of a corporation.
How a corporation is formed and organized.
Important roles within a corporation:
Stockholders- Stock holder is a person who buys one share of the corporation. There basic rights are : transfer ownership to others, vote on special matters, receive dividends ( dividends are profits that are distributed to stock holders on a per-share basis) buy new shares of stock, share in the net proceeds (cash received from the sale of all assets less the payment of all debts). Being a stockholder, there is no liability beyond the extent of the stockholder's ownership.
The board of directors - The board of directors is the ruling body of the corporation. Their responsibilities to develop plans and policies to guide the corporation as well as appoint officers to carry out the plans. if the business is successful they have freedom to deal with policy issues and review the progress of the company; however, if their profits fall, the board other steps in and takes an active role in the operational management of the business.
The officers- The officers of a corporation are the top executives who are hired to manage the business. The board of directors appoint the officers. The officers of a small corporation consist of a president, a secretary, and a treasurer; larger corporations have vice presidents in charge of major areas, such as marketing, finance, and manufacturing.
open vs. closed corporations.
an open corporation is one that offers its shares of stock for public sale. Examples are Walmart, McDonald, and Apple.
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A closed corporation is one that does not offer its shares of stock for public sale. Just a few stockholders own it; some of them may help run the business in the same manner that partners operate a business.