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27Feb 2020

What are stockholders and shareholders?

A shareholder is typically an individual or entity that has an ownership stake in the corporation (a C Corporation or an S Corporation, among others). Shareholders become shareholders by putting money or property into the corporation, or by being granted stock in the corporation (which might have its own tax consequences, frequently overlooked until the […]

27Feb 2020

What does “capitalization” mean?

Capitalization can mean a couple of things. At first it usually refers to the contributions of money or property that the owners (shareholders or members) have contributed to the business, their “capital contributions”. Later on, or as a result, or in anticipation of such contributions, it may refer to a capitalization chart or table, which […]

27Feb 2020

What are directors?

Directors are the individuals who make up the board of directors. Due to the responsibility these individuals have, it’s common for the corporation to obtain insurance to cover the directors (aka D&O insurance) for the decisions they make, even though the existence of the corporation is supposed to shield – sometimes things don’t go the […]

27Feb 2020

What is a dividend?

Hopefully something that you have plenty of! A dividend is the cash (or property) that is transferred from the corporation to its shareholders after all expenses are paid, including the corporation’s taxes. Only C Corporations pay “dividends”; S Corporations make “distributions”, since S Corporations themselves do not generally pay taxes. A dividend is not a […]

02Sep 2020

What’s a “distribution”?

In lay terms, a distribution is another way of saying a payment to a shareholder, partner or member of the business’s profit. Typically the distribution is in the form of cash, but sometimes it’s in the form of property like an asset. What you receive typically depends on your percentage interest in the business. So […]

27Feb 2020

What does a CEO do?

A CEO is the Chief Executive Officer. This is the person responsible for over-seeing all of the day-to-day activities of the corporation. Sometimes LLCs have CEOs. The CEO is the face of the company, and so larger businesses tend to hire a CEO that has appeal to the public to encourage investment in the business, […]

27Feb 2020

What does a CFO do?

The Chief Financial Officer, sometimes known as the treasurer, handles the financial aspects of the corporation or LLC. In larger businesses, the CFO becomes an advisor to the CEO, conferring on best approaches for increasing business or investment. In a very small business, the CEO and CFO are frequently the same person, and there’s nothing […]

27Feb 2020

What does a corporate secretary do?

Corporate secretaries are the unsung heroes in the officer world. They are responsible for the grunt work of the corporation or LLC, making sure i’s are dotted, t’s crossed, taking corporate minutes, and frequently interacting with the business’s lawyer to make sure paperwork and corporate housekeeping are all in order. In a very small business, […]

27Feb 2020

What does a COO do?

The position of Chief Operating Officer is not required under state law, but businesses that are growing, or intend to grow, will almost always have one. The COO is responsible for the day-to-day of the business, and usually reports to the CEO. And so I know I said that that’s the CEO’s job; in larger […]

30Oct 2020

Should my corporation (or LLC) have a Vice President?

It depends. A vice president in your corporation (or LLC) is tasked with acting on behalf of the CEO or President of the entity. This could come in handy if you, presumably being the CEO, aren’t available to sign a particular emergent contract. In your absence, the VP would act on your behalf with all […]

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