The type of legal structure you choose to utilize in the formation of your business lays the foundation for how your business will operate, be taxed, and proceed in court. Although that is a challenging enough proposition to begin with, especially because there are many options, the matters relating to business formation don’t stop there. Instead, a new business owner must consider things like funding, supply chains, human resources, and establishing contracts with pertinent parties.
For corporations, another issue that must be addressed is choosing a board of directors. This group is elected by shareholders to oversee corporate management and make major decisions that affect the business. Although private corporations are not required to have a board of directors, public corporations are. Even private corporations can find benefits in appointing a board of directors, though.
There are many things a board of directors can do. For example, the board can establish executive compensation, which can determine the type of talent that the business attracts. Also, a board of directors can help a business lay out long-term goals and a plan for how to achieve those goals. These matters are often overlooked by those who are involved in the day-to-day operations of the business.
The exact structure of a board of directors is dictated by a business’s bylaws. These terms can lay out how many directors will make up the board, how directors will be added and removed, and from whence they will be chosen. This means that the early stages of the planning process can have significant ramifications moving forward. For this reason, those Baton Rouge area entrepreneurs who are considering starting a corporation need to carefully consider every decision before making them. This is where the experience of an attorney who has helped countless others with business formation matters can prove beneficial.