A corporation is a legal entity owned by shareholders and managed by a board of directors. Shareholders elect a board to oversee management. Management ensures the corporation works towards its goals – setting strategic direction, approving investments, hiring the CEO.
Shareholders own a corporation by purchasing shares. Their ownership is proportional to shares owned. Shareholders profit through dividends and stock value increases but aren’t liable for debts.
A corporation has rights like individuals – owning assets, contracts, borrowing, lawsuits. It lasts until its charter changes or purpose ends via liquidator. Assets sold, proceeds to creditors first.
Legal Duties of a Corporation
A corporation comprises shareholders, a board of directors, and officers. Shareholders own it by purchasing shares. Shareholders elect the board. The board oversees management to ensure the corporation works towards goals like setting direction, approving investments, and hiring the CEO.
Shareholders receive one vote per share. Their ownership matches shares owned. Shareholders get dividends and stock growth but not liability for debts.
A corporation has individual rights – owning assets, borrowing, contracts, lawsuits. It lasts until its charter changes or purpose ends via a liquidator selling assets. Proceeds go first to creditors.
The board must keep shareholders in mind, upholding fiduciary duties. Two main fiduciary duties are loyalty and care. Loyalty means directors can’t profit personally at corporate expense. Care requires directors exercise reasonable care and diligence in responsibilities.