A corporation is a lawful body that is governed independently from its members. Corporations have the legal capacity to sue and to be sued and the right to own property employ workers and engage in legal and viable contracts as separate legal entities from the owners. It also has the capacity to make by-laws that govern the internal functioning of the organization; the rules and regulations are supposed to guide the conduct of all the parties of the organization (Charan, 1998). The most important characteristic of the corporation is its restricted liability which means that corporate shareholders have the right to have a hand in the profits, stock share and dividends. The directors of corporations, shareholders of the corporations, and the officers play an important duty in the legal duties of the corporate process (Ford, 1992).
The board of directors of the corporation is responsible for maintaining and controlling the operations of the company. The board of directors of the public corporations provides corporation continuity by setting up legal statutes and structures and representing the corporation’s stand by interpreting its products and services (Charan, 1998). The directors have the responsibility to appoint and select the Chief executives who will be entrusted with the administrative responsibilities. They govern the organizations by assigning duties and priorities to the chief executive and employees and they have the capacity to review their work. They should look for resources to run the corporation and finance the products and services effectively. They are held accountable for the expenditures and the funds of the corporation. There is not much difference between the closed corporate and those in the public corporations except those of the closed corporations have extra responsibilities in that they can serve as a corporate court of the appeal and enhance the image of the company in the public and they are held responsible for the company’s debts (Ford, 1992).
Shareholders are those individuals who own part of the shares in a corporate. In closed corporations, they have a lot of duties as compared to those in the public corporate. In closed corporate, those with a lot of shares are entitled to control of the corporations. Controlling shareholders have a lot of responsibilities in the corporations as compared with those with little shared some of the duties of the controlling shareholders include: the right to decision making, participation during the election of the board of directors. Usually, they are entitled to one vote per share (Charan, 1998). They have a duty to participate in shareholder resolutions, duty to purchase new shares of the corporation (Ford, 1992).
Corporate officers are those employees of a corporation that manage the daily activities of the corporation. They include the president or the Chief executive officer (CEO), chief operating officer (COO), chief financial officer (CFO) treasurer and the secretary. The president should direct and supervise all the technical and administrative activities of a corporation, they can amend or alter the budget in any manner they deem fit and at any time (Charan, 1998). The treasurer’s duties involve the duty to report to the board of directors concerning matters the financial status of the corporation, recommendations in the financial policies and the procedures, and report approval by the financial committee among others. The corporate secretary’s duties include preparation and distribution of notices and memos, preparation and distribution of minutes that were discussed in the board meetings, maintaining corporate records and other books (Ford, 1992).
References
Charan, R. (1998). Boards at Work: How Corporate Boards Create Competitive Advantage. San Francisco. Jossey-Bass.
Ford, R. H. (1992). Boards of Directors and the Privately Owned Firm: A Guide for Owners, Officers, and Directors. Westport, CT: Quorum Books.