Board of Directors is appointed by the shareholders to take care of their best interest and act as representatives of the shareholders. Board of Directors is the true governing body of the company. The authority to set business goals and to regulate business methods wrests with the board of directors. Board of directors is empowered by the shareholders to guide a company’s operations and form opinions and strategies for the growth and development of the corporation.

Features:

A board meeting usually runs for a longer duration than the shareholders meeting and the frequency of the meeting is also more as compared to the shareholders meetings. Board meetings touch more comprehensive topics related to the operations of the company and the ways or strategize the implementation of certain decisions or resolutions passed by shareholders. The Board can pass resolutions except those which involve the approval and involvement of the shareholders as per the company bylaws. These meetings and the content can be confidential contrary to the shareholders meeting, where the agenda, minutes and the decisions taken are not confidential.

The Board Meetings Generally Cover the Following Subjects:

• Chalking out strategies of the company
• Put forth the recommendation about the classes of shares and about the number of shares of each class may be offered
• Laying out investment plans for future growth
• Laying out a roadmap on solutions for market expansion, marketing and technology
• Guiding the approval of contracts for purchase, sale, borrowing, lending and other contracts and total value of assets recorded in the accounting book of the company.
• Decisions related to the appointment, termination of the director (general director) and other key executives of a company
• Decisions pertaining to the organizational structure and internal management
• All the decisions related to the establishment of subsidiary companies and the opening of branches
• Preparation and submission of annual final financial reports to the General Meeting of shareholders
• Approving the agenda and documents of the General Meeting of shareholders
• Recommendation of re-organization or dissolution of the company
• Approval of various Bills against loans & other financial liabilities
• Consideration of any new business approval

The Activities Can Be Broadly Summarized Under the Following Headings :

• Description of the issues.
• Decisions to be taken.
• Reviewing previous decisions.
• Discussing all the available options, including discussion of the pros and cons of each.
• Impact of budget and/or staffing.
• Detailed recommendations on various subjects

The board of directors meeting can be conducted even without physical presence of all directors. Virtual Meeting can also be conducted, wherein the participant can be logged on to video conferencing which can validate the presence as good as face to face interaction.

Whether the initial meeting of the Board of Directors is undertaken by agreed upon written consent or by an actual meeting with waiver of notice, certain organizational actions must be taken by the directors. These actions are taken in the form of resolutions adopted by directors which relate to the formation of your corporation. Some of the items included in the organizational resolutions will also be included in your corporation’s bylaws.

The Board of Directors holds its first meeting to take certain actions to complete the organization of the corporation. These actions are taken in the form of resolutions at the first meeting of the Board of Directors. If the board of directors has been named in the articles of incorporation, generally they will adopt the initial bylaws of the corporation

Bylaws are the rules and regulations adopted by a corporation for its internal governance. Bylaws usually contain provisions relating to shareholders, directors, officers and general corporate business. Bylaws are a private document not filed with any state authority. Bylaws are more flexible than the articles of incorporation because they are easier to amend.

Bylaws normally cover the following:

• General corporate matters
• The company’s fiscal year
• The size of the board of directors
• Duties and responsibilities of directors and officers
• Regulation of the transfer of corporate stock
• When and how board meetings are called
• When and how shareholder meetings are called (including a notice)
• Procedures for exercising voting rights
• Indemnification obligations for officers, directors, and agents

These Bylaws and can be contained within a single written document. They dictate the operating principles and procedures that the corporation will follow throughout its life as a business entity, therefore are very key when outlining what the corporation can and cannot do.

Here Are Five Reasons Your Corporation Should Adopt Bylaws :

• The outside world expects a corporation to have Bylaws; Banks, credit companies, and the IRS expect a corporation to have Bylaws;
• The adoption of Bylaws indicates that your corporation takes its corporate responsibilities seriously;
• Bylaws provide broad and day-to-day guidance in running your corporation; and
• When you adopt Bylaws you have addressed various key issues for the operation of your corporation.

Corporate Resolutions, Bylaws, Company Minutes and Stock Ledger information maintained properly are vital to the continued success and existence of a corporation. They are the unfailing protection of the company directors and shareholders.

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Managing a corporation is no easy task, as is managing the various corporate documents that are used on a day-to-day basis in order to run the company. These corporate documents have to be recorded and filed, as it is necessary for a corporation to maintain records for a minimum of 6 years at least. The documents are proof that all the activities of the corporation are carried out as per the directive of the board of directors and the shareholders. A proper and efficient filing system is of paramount importance to make sure all the documents are safe from the dangers of theft as it can cause great harm to the company, if confidential matters are lost due to inadequate security.

Kinds of Corporate Documents:

When the company has been incorporated, the article of incorporation is the first basic document, which is the proof of the creation of the company. It is the documented proof of the corporate purposes and its powers, authorizing capitalization of stock and has to be filed with the Secretary of State after an appropriate fee has been paid and it has been notarized and signed by the incorporators. The certificate of incorporation is issued after being duly signed by the Secretary of State declaring the corporation to be a legal body as of its date of incorporation. Then there is the consent of Agent for service of process for the jurisdiction where the company was incorporated. The bylaws and the amendments of the articles of incorporation adopted by the corporation are other important documents. The minutes of all meetings and the consent in lieu documents, notices and waiver of notices, alphabetical list of shareholders for a meeting and proxies for a meeting are the next set of important documents. Letters addressed to the shareholders, resignation letters of directors, secretary certificates and shareholders agreements are other documents that are documented and kept safe by the corporation. Copies of share certificates issued are also filed and documented, as is the stock ledger with the folio pages, providing information regarding the name, address, date of issue, to whom it is issued, documents with the share holder’s signature acknowledging the receipt of the certificates. The stock ledger is maintained to know exactly who owns each share of the corporation currently. It is updated regularly with documented proof of such actions as transfer of share, if it is an original issue of share, or if the share has been received as a gift from another share holder, if the shares have been transferred from a deceased shareholder to his estate or a joint survivorship agreement makes the joint owner of the shares the new single owner of all the jointly held shares etc. Another important document associated with shares is the stock subscription agreement.

The company has to deal with a lot of legal documents such as government related documents such as franchise tax renewals, license renewal, a report of the company’s annual meetings etc.

The company has to document the financial records as well and maintain a current balance sheet, a profit and loss statement document, a host of other documents related to the corporate finance such as bank statements, records of all payments made for transactions, the fees received and the scale of pay of each of its employees, there are documents concerning dividends and the type of dividend agreed on by the board of directors and the shareholders, the various resolution that are proposed, those that are accepted and passed by a quorum of directors, the resolutions that are rejected, documents relating to bank transactions such as borrowing, relating to insurance etc. There are legal documents relating to the hire, purchase, lease and renting of assets, processes of litigation, bankruptcy filing etc. Documents relating to the S-corporation status are also important for a corporation.

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