A typical corporation's structure consists of three main groups: directors, officers, and shareholders. The roles and responsibilities of these groups are described in more detail below.  

Board of Directors

One of the first steps a new corporation will take is to name the members of its board of directors. Usually, directors are identified in the "articles of incorporation" and/or "bylaws" of the corporation, or are selected by the person who takes the initial step of incorporating the business (sometimes called the "incorporator"). Once the corporation is up and running, directors are typically elected by shareholders at annual meetings. 

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.

The number of directors serving on a corporation's board usually depends in part on the size of the business and its holdings, but this number is typically stated in the corporation's articles of incorporation and/or bylaws. A small corporation might have one director (who may also serve as the sole officer and shareholder), while a large corporation may have 10 or more people serving on its board of directors. For voting purposes, a corporation with more than one director should keep an odd number (3, 5, 7, etc.) of directors on its board.