Corporate shareholders are the owners of the company, their most important function being to elect the board of directors. The board has overall responsibility for the company’s business, and elects the company’s officers. Officers manage the day to day business of the company.
Directors must act in the best interests of the company and its shareholders. They are fiduciaries, a relationship based on trust and confidence. The board should not be so large as to be unwieldy, and should preferably be an odd number to avoid deadlocks. The board meets annually, but should meet more frequently to provide advice and guidance to the company.
Certain corporate actions require shareholder approval. The corporation generally holds an annual shareholder meeting, but can hold special meetings as needed. In addition, shareholders can approve corporate actions by their unanimous consent without a meeting.
A corporation’s minute book holds important corporate records, and should be kept current. For instance, the minute book holds the company’s articles of incorporation, bylaws, and minutes and written consents of meetings or other actions of the company’s directors and shareholders.