Corporations
Caitlin O'Bryan
What are they?
Three Key Types of People
Shareholders
Shareholders are the "owners" of a corporation. Also known as stockholders, these people can buy shares. Ownership is divided into equal parts of shares. Thousands of people can buy and own shares, therefore owning a small piece of the company. Each stock/shareholder is given a certificate showing them how many shares/stocks they own and can also share proceeds if a company goes out of business as well as receive dividends (profits distributed on a per share basis). A good thing about being a stockholder is the limited to no liability/responsibility beyond the stocks that are owned. This means shareholders can lose the money they invested, but no more.
Directors
Stockholders elect the directors. The directors are the ruling body of the corporation. They develop plans and policies to guide the corporation and have the responsibility of appointing officers to put those plans in motion. The Board of Directors, or simply "the board", will rarely step into the officers' operations unless the corporation is losing profits or there is an issue the officers can not handle. A lot of times, directors are stockholders that hold a lot of shares but that is not required.
Officers
Officers are almost synonymous with managers as they are the top executives who manage the corporation. Fundamental positions held by even small corporations are a president, a secretary, and a treasurer. Larger corporations may include a vice president branch that is responsible for marketing, finance, and manufacturing. Other examples of titles, especially those that are shortened to a few letters, are: CEO (chief executive officer) and CFO (chief financial officer).