How Are Corporations Managed? 

 Posted on July 12, 2023 in Business and Commercial Law

If you are thinking about structuring a new business venture as a corporation, you may understandably have concerns about partially surrendering control of your vision to other stakeholders. While it is true that corporations are generally owned by more than one shareholder and are managed by boards of directors, you can approach your business in a number of ways that will help to preserve your vision. Structuring your company as a corporation does not mean that your venture will no longer be “yours.”

How Does a Board of Directors Operate? 

Although there are some exceptions to this structure, most corporations in the U.S. are governed by a board of directors and run by a management team. Although managers can sit on a corporation’s board, those who govern a corporation and those who manage its day-to-day operations need not overlap. Generally speaking, board members are voted into their positions by shareholders, whereas managers are hired by the board.

Do All Shareholders Have a Say in How a Corporation Is Run?

There are two primary ways that corporations can structure the way shares in a company translate into votes. In some scenarios, each shareholder gets a single vote, regardless of the number of shares in the company they own. In others, each share translates to a single vote. This means someone could own hundreds of shares in a company and benefit from significant voting power as a result. When thinking about how much influence you want to retain within your new business, you will want to weigh the potential benefits and drawbacks of each approach given how many shareholders your company is likely to attract.

Seek Guidance from a Reputable Tarrant County Business Lawyer Today for More Information

Launching a new business can be an overwhelming process. It can be particularly challenging to get a corporation up and running due to the numerous, detailed formation requirements to which corporations must adhere. Thankfully, you do not need to navigate the process of forming a corporation designed to fulfill your business vision alone. The knowledgeable team of Tarrant County, TX business lawyers at Cain & Kiel Law is available to assist you.

To learn more about your rights as the founder of a new corporation – and to learn about our firm’s approach to business-related representation – you can schedule a risk-free, confidential case evaluation today. At your convenience, you can either call the firm directly at 817-645-1717 or submit a contact form on the firm’s website. We look forward to hearing from you.

Source:

https://www.investopedia.com/articles/basics/03/022803.asp