LAW 18B Chapter Ch. 40 Corporate Directors, Officers, & Shareholders:

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The board of directors is the ultimate authority in every corporation. The board selects & removes the corporate officers, determines the capital structure of the corporation, & declares dividends. No individual director can act as an agent to bind the corporation. A director can be a shareholder, but is not necessary. The initial board serves until the first annual shareholders" meeting. Subsequent directors are elected by a majority vote of the shareholders. A director usually serves for one year--from annual meeting to annual meeting. A common practice is to elect of the board members each year for a 3-year term. A director can be removed for cause--failing to perform a required duty. Vacancies occur if a director dies or resigns or when a new position is created. Shareholders or the board can fill the vacant position and an election is held.

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