To the officers of a corporation fall the responsibilities of running the business. Their powers, however, are dictated solely by the board of directors. Officers can be given very broad powers to transact virtually all business for the corporation, or they can be tightly limited in their authority. A single shareholder can act as both the sole director and the sole officer of a corporation in most states. The officers, however, even in this circumstance, still derive their authority from resolutions of the board of directors. Prudent businesses often require copies of the authorizing resolutions in the course of large transactions.
There may be many levels of corporate officers. Traditionally, there are four main officers: president, vice-president, treasurer, and secretary. Their specific powers should be outlined by the directors in the corporate bylaws and their authority to transact individual business deals should be detailed in board of directors resolutions. In general, the president acts as the corporation’s general manager, handling the day-to-day operations. The vice-president normally acts only in the absence of the president, although this officer can be given specific responsibilities. The treasurer handles the corporate funds and is responsible for the accounting books. The secretary handles the corporate records (minutes, resolutions, etc.) and is also generally responsible for the corporate stock and corporate stock transfer book.
The officers are appointed by the board of directors at annual meetings, although special meetings can be called for this purpose. The officers may be required to report individually to the board. Often the president will be called upon to present an annual report regarding the overall condition of the corporation. The treasurer will present an annual financial report at the directors meeting. The secretary will handle all of the records, including copies of these annual reports. In many corporations, the president keeps in contact with the board of directors on a much more continual basis. However, any major decisions that affect the corporation should be carefully documented and, if necessary, a special meeting of the board of directors should be called and a formal resolution adopted.
The formalities of corporate structure may seem complex for small businesses and even foolish for corporations with a single owner/director/officer. It is important to understand that it is the recognition of this structure and the documentation of corporate actions taken within this structure that afford the corporation its limited liability protection and taxation benefits.
To purchase one of the forms discussed in this section or to obtain more information about officer responsibilities, resolutions and other similar forms, please click on the appropriate link below:
- Corporate Bylaws
- Corporate Stock Transfer Book
- Board of Directors Resolutions
- Directors Annual Meetings
- Directors Special Meetings
- Financial Record Keeping Kit
Find out more about S-Corporations, and learn about Shareholders and Directors of an S-Corporation in our Operating an S-Corporation Category.
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