Board of Directors Requirements
Any business that becomes incorporated is required to have a board of directors. The board of directors is responsible for managing the general actions of the corporation. They typically are not involved in the day to day activities of the business but can exert significant influence over decisions by establishing company policies. Knowing the responsibilities of the board of directors can help you prepare for the transition to an incorporated business.
Director Responsibilities and Involvement
The board of directors guides the actions of a corporation in a number of ways. Some of the decisions and actions that the board may make include:
- Establishing company policies
- Amending policies
- Electing officers for the corporation
- Approving major business contracts
- Issuing stock dividends
The board of directors for a corporation must meet on a regular basis as mandated by the state. Typically a board meets either monthly or quarterly. The officers the board elects or appoints are responsible for conducting the day to day activities of the business and reporting their progress to the board.
If you are considering incorporating your small business, it may be in your best interest to consult with an experienced business formation advisor. Your advisor can help to clarify the difference between C corporations and S corporations, as well as the roles of all actors within the corporation structure.
Contact Us
To learn more about incorporating your small business, contact the Texas business formation advisors of Texas Legal Entities today at 512-472-2431 for a free consultation.
At any time, please feel free to ask us a question. It's FREE!