The duty for directors, officers and shareholders
A typical corporation's structure consists of three main groups: directors, officers, and shareholders in Hong Kong Limited Company.
Board of director
One of the first steps a new corporation will take is to name the members of its board of directors. As suggested by its name, the board of directors "directs" the corporation's affairs and business path. The board of directors also has ultimate legal responsibility for the actions of the corporation and its subsidiaries, officers, employees, and agents. A corporate director's duties and responsibilities typically include:
• Acting on behalf of the corporation and its best interests with an appropriate "duty of care" at all times;
• Acting with loyalty to the corporation and its shareholders;
• Participating in regular meetings of the board of directors;
• Approving certain corporate activities and transactions -- including contracts and agreements; election of new corporate officers; asset purchases and sales, approval of new corporate policies; and more;
• Amending the corporation's bylaws or articles of incorporation.
Corporate Officers
The corporation's officers oversee the business's daily operations, and in their different roles they are given legal authority to act on the corporation's behalf in almost all lawful business-related activities. Officers are usually appointed by the corporation's board of directors, and while specific positions may vary from one corporation to another, typical corporate officers include:
• Chief Executive Officer (CEO) or President. The CEO has ultimate responsibility for the corporation's activities, and signs off on contracts and other legally-binding action on behalf of the corporation. The CEO reports to the corporation's board of directors.
• Chief Operating Officer (COO). Charged with managing the corporation's day-to-day affairs, the COO usually reports directly to the CEO.
• Chief Financial Officer (CFO) or Treasurer. The CFO is responsible (directly or indirectly) for almost all of the corporation's financial matters.
• Secretary. The corporation's Secretary is in charge of maintaining and keeping corporation's records, documents, and "minutes" from shareholder meetings.
Keep in mind that in smaller corporations, one person may serve as the business's sole director, officer, and shareholder.
A corporation's shareholders have an ownership interest in the company, by having money invested in the corporation. A "share" is an apportioned ownership interest in the corporation, and the value of a single share can range from less than a 1% interest in the corporation, to 100%.
When a corporation is first formed, its original owners are usually its first shareholders, and in smaller corporations these initial investors may remain the sole shareholders throughout the corporation's existence. A smaller corporation's few shareholders may consist of those involved in day-to-day business operations (as owners, managers or employees). Whatever the number of shareholders in a corporation, each shareholder usually receives a stock certificate from the corporation, identifying the number of shares held by the investor.