As we have mentioned on this blog many times before, there are a considerable number of issues that must be considered before starting a business. A business structure must be chosen, critical positions must be filled, a business plan should be developed, and financing must be acquired. Yet, even once the doors of a business open, the ongoing management and direction of the business can be crucial, setting the stage for success or failure. This is why a business's board of directors are so important.
The board of directors is a collected group of individuals who are elected, usually to represent shareholder interests. That being said, even private and nonprofit companies can have a board of directors. These individuals are tasked with providing oversight of the business's executive level, and they often implement and monitor a business's policies. They often make major decisions that affect the business, too, including those decisions related to mergers and acquisitions.
So what does a board of directors have to do with business formation and planning? The number of directors and their powers are enumerated in a business's bylaws, which are usually created upfront. The bylaws can even specify how board members are to be elected. This means that those looking to create a business, especially a corporation, need to carefully consider how much board oversight they deem necessary and how much power they want the board of directors to have.
An attorney who is skilled in business law can help provide advice when creating a business, including how to handle matters regarding a board of directors. Therefore, those looking to step into the world of entrepreneurship should consider sitting down with one of these legal professionals to thoroughly analyze their options and act in a way that is in furtherance of their best interest.