Shareholders

• Shareholders are the owners of the corporation. There are different classes and types of shares that a shareholder may own, but all shareholders are owners of the company in some way. Shares of the company may also be referred to as shares of corporate stock, so shareholders are also called stockholders.
  
  

Board of Directors

• Shareholders nominate a Board of Directors to manage the affairs of the corporation. In small companies the shareholders typically nominate themselves to manage the company. In large companies this is not always the case.
  
  

Officers

• Corporate officers run the corporation day to day. Popular job titles that are corporate officers include: CFO, CEO, and CTO. Corporate officers may be held personally liable for the activities of the corporation if it can be proved that the officer acted in bad faith.
  
  

Directors Meetings

• The board of directors is required to meet at least annually to hold a formal meeting. During this meeting the shareholders nominate new directors to manage the company next year and the board of directors nominates new officers to run the company during the next year.
  
  

Importance of Corporate Governance

• Many small business owners assume that they can ignore corporate formalities such as annual shareholders' meetings and the nomination of directors and officers. While large corporations find these processes more important due to the size and complexity of their business, even small businesses need to follow these formalities.