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Corporation #1: incorporated sole proprietorship

Corporation #1: incorporated sole proprietorship. sole shareholder. 100% of shares. sole shareholder elects himself as sole member of Board. corporation. Board of Directors. 1 shareholder:

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Corporation #1: incorporated sole proprietorship

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  1. Corporation #1: incorporated sole proprietorship sole shareholder • 100% of shares • sole shareholder • elects himself • as sole member of Board corporation Board of Directors 1 shareholder: dominates corporation; no minority owners; no need for statutory protections or shareholders’ agreement • then as Board, • appoints himself: all officers: president, vice-president, treasurer, and secretary

  2. Corporation #2: closely held corp. shareholder 5 shareholder 1 shareholder 2 shareholder 3 shareholder 4 • each owns 20% of shares • 3 shareholders with 60% majority • can elect and dominate Board corporation Board of Directors 2 to 50 plus shareholders: the majority owners manage business of the corporation; minority owners may be shut out on Board; need statutory protections and shareholders’ agreement • appoints: officers: president, vice-president, treasurer, secretary

  3. Corporation #3: publicly trade with millions of shareholders shareholder shareholder shareholder shareholder shareholder • millions of shareholders: • elect professional Board • each owns tiny % of shares corporation Board of Directors millions of shareholders: few own more than 0.01% of shares; a 10 to 30% shareholder can dominate Board; professional management entrenched? • appoint officers: president, vice-president, treasurer, secretary • professional managers • manage business

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