3.2 Persons of Note

Question 1

Who are the three most important players in a corporation?

Answer 1

Shareholders, Directors, and Officers.

Question 2

What is the role of shareholders in a corporation?

Answer 2

Shareholders are the owners of the company, investing money by buying shares, but they do not manage the business.

Question 3

Can shareholders be legal entities?

Answer 3

Yes, shareholders can be either human beings or legal persons (such as other corporations).

Question 4

What is the main power of shareholders?

Answer 4

Shareholders elect the directors of the corporation at the annual shareholder’s meeting.

Question 5

Are shareholders liable for corporate debts?

Answer 5

No, shareholders have limited liability and are not personally responsible for company debts.

Question 6

Can a shareholder also be a director or officer?

Answer 6

Yes, if the shareholder is a human being, they can also serve as a director and/or officer.

Question 7

What are the qualifications to be a director?

Answer 7

A director must be:

A human being (not a corporation)
Of legal age
Of sound mind
Not prohibited by the courts
Not bankrupt

Question 8

How many directors must a corporation have?

Answer 8

A company must have at least one director.

Question 9

What powers do directors have?

Answer 9

Directors have full power to manage all company affairs, including:

Issuing new shares

Declaring dividends

Raising or borrowing money

Overseeing major business decisions

Question 10

Can directors delegate responsibilities?

Answer 10

Yes, directors can delegate day-to-day management to officers.

Question 11

Can directors also be shareholders or officers?

Answer 11

Yes, a director can be a shareholder and/or an officer.

Question 12

Who are officers in a corporation?

Answer 12

Officers are senior employees responsible for the day-to-day operations of the company.

Question 13

What are some examples of officer positions?

Answer 13

Chief Executive Officer (CEO) – Top executive of the company

**Chief Operating Officer (COO) **– Oversees daily operations

Chief Financial Officer (CFO) – Manages company finances

Treasurer – Handles financial matters

Secretary – Manages legal and corporate records

Corporate Counsel – In-house legal advisor

Question 14

Can officers also be shareholders or directors?

Answer 14

Yes, officers can also be shareholders and/or directors.