Who may serve as President and CEO of a small corporation?
Full Question:
Answer:
In order to register a corporation in the state of Texas, the organizer (person who does the registration) is required to list all the directors of the corporation. A corporation must have a Board of Directors, which is charged with the overall responsibilities for the corporation.
Similarly, a corporation is required to have at least one shareholder, although a list of the shareholders is not required.
The shareholders appoint the Board of Directors, which can, and often will, include some of the shareholders. In small businesses the owner may be the sole director. Sometimes, however, as a corporation grows, it becomes advantageous to bring in an additional director, or directors, to present other opinions and expertise on business matters.
The role of the Board of Directors is to manage the corporation. This will likely include establishing policies which the business will follow, and making major business decisions such as establishing and amending bylaws, issuing dividends, approving major contracts or mergers, making key decisions regarding real estate owned or managed by the corporation, and electing or appointing officers.
Anyone may serve as an officer, including as the President or the CEO. It does not have to be a shareholder or member of the board of directors, although that is common in a small corporation. Typically, a corporation’s by-laws contain the procedures for appointing, electing and/or removing officers.