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How is a Corporation Structured?

The organization of a Corporation works as follows:

Corporate Structure DiagramThe Stockholders are the owners of the Corporation and hold the stock certificates. Each share of voting stock is entitled to one vote, which is where the control of the Corporation comes in. The primary function of the Stockholders is to elect the directors of the Corporation. In the case of small privately held Corporations or a one-person Corporation, the Stockholder(s) may choose to elect themselves as the Directors.

The Directors of the Corporation are responsible for the overall management of the Corporation, setting policy, and making decisions based upon the best interests of the Stockholders. In turn, the Directors hire the Officers.

The Officers oversee the day-to-day operations of the Corporations and carry out the policy and wishes handed down by the Board of Directors. The responsibilities of both the Directors and Officers are usually contained within the bylaws of the Corporation as set by the Stockholders and the Directors. A Director(s) may elect himself as an Officer, which is very common in the case of small Corporations.

The Employees are hired by the Officers to perform the day-to-day duties of the business. These duties are based upon the initial instructions outlined by the Directors.

It is entirely possible for one person to act as the Stockholder, Director, Officer and Employee of a Corporation

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