Every organization has a structure to regulate such matters as corporate control, entry, exit and the like. In this article, a Reno corporate services attorney explains the matter of legal control in corporate or partnership settings.
The Shareholders and Partners
Essentially, these are the people who own the stock, and therefore the company, with the degree of ownership proportionate to the number of shares that each shareholder possesses. They attend annual shareholder’s meetings at which times they choose the senior officers and the board of directors by either direct or proxy vote. This is their primary means of retaining control over the company, as most other corporate matters are decided upon by the board of directors. In a partnership, this falls to the partners. Ownership of the company is divided between them much as it is with shareholders. Instead of the board of directors, they decide by vote who will serve on the managing committee and exert a similar level of control.
Board of Directors and Managing Committee
These are the people who make the executive decisions in a corporation or partnership respectively. They choose the senior officers such as the President or CEO, Vice-President, Chief Financial Officer and so on. They determine the pay scales, handle all of the personnel decisions at the executive level, set the corporate or partnership policies, decide on bonuses, handle any major stock decisions such as issuance, stock splits or repurchases. They also make major financial decisions concerning lending or borrowing at the corporate level, etc. Once the policies are in place, however, the senior officers run the company on a day-to-day basis according to the policies set by the board or managing committee.
Senior Executives and Managing Partners
These are the people who manage the corporation or partnership; they supervise the employees and exert control over the everyday operations. The officers usually consist of a president or CEO, a corporate secretary and treasurer or CFO and a number of vice-presidents for the various departments in the company. In a partnership, these duties fall to the managing partner, who performs all of these functions.
These are the people who do the work. They accomplish the daily tasks that keep the business going. They are the office staff, the customer service people, the medical support staff, the people who keep the office clean and maintained and so forth; they are the lifeblood.
The Managing Partner
Essentially, this person is doing what nobody else wants to do. This places the vast majority of the responsibility and more importantly, the power, in the hands of this individual. This partner handles all of the directorial, financial, executive and managerial tasks and wields the power that comes with it. This can be a heady mixture. It can also create a dangerous void if the managing partner decides to retire, leave the business for another, go into private practice or for some other reason sever relations with the partnership. If that should happen, the other partners will need to step up to the mark in order to avoid a breakdown in the running of the business.
Engage a Reno Corporate Services Lawyer Today
If you have questions, would like additional information, are seeking legal counsel or representation or are otherwise in need of assistance, contact your Reno corporate services attorney by calling Garret Sutton at 800-700-1430 without delay.