often hold the position of
Chief Operating Officer (COO).
The President/COOhas the overall executive responsibility for the management of the corporation and isresponsible for day-to-day operations. He/she is directly responsible for carrying out theorders of the board of directors. The President/COO usually has vice-presidents for differentparts of the company reporting to him or her.In a corporation with many different businesses (a conglomerate), there may be one CEO whooversees a number of presidents, each running a different business of the conglomerate andreporting to the one CEO. A company without subsidiaries may have one person execute theroles of CEO and president (and perhaps even chairman).The
(Chief Financial Officer) leads the financial structure of the company: how it raisesmoney to fund operations, how it accounts for the business and how it reports to owners(shareholders).It's important to remember two significant facts about actions taken by officers:1.Executive officers have the authority to legally bind the corporation; and2.Officers are not personally liable for their acts while acting (lawfully) on behalf of thecorporation.
are the owners of the corporation. Each share of stock represents a financialinterest in the company. Shareholders can receive stock for cash or services to the company.Shareholders are responsible for electing the Board of Directors. Unless the shareholders arepart of the management team (directors or officers), they have no authority to control theoperations of the company. If they are dissatisfied with the company, they may elect a newboard of directors or simply sell their shares. When the company has a profit, it may pay partor all of it to its shareholders in the form of a dividend.
Who are other stakeholders?
A stakeholder is a person or group not owning shares in an enterprise but having an interest inits operations. Examples are the employees, customers, creditors (e.g., banks, bond holders),suppliers, regulators, and the community at large.
How is a Corporation formed?
A company must write several legal documents and file them with a state in order to “becomeincorporated.” A Corporation's "
Articles of Incorporation
" is the main filing document, whichbegins the corporation's existence under state law. Once filed, the corporation commencesexistence.A corporation's Articles of Incorporation can range from very simple to extremely complex.Articles of Incorporation contain information that all states need in order to form thecorporation. Generally included in the articles are items such as: the name and purpose of thecorporation, the names of the initial directors, the name of the Registered Agent, and thenumber and par value of authorized shares of stock. Requirements vary by state.