Does a company director have to be a shareholder?
No, shareholders and directors have different roles in a company. Shareholders own the company; they receive profits the if the company is successful. Directors are elected by the shareholders of a company. Directors are authorized to make decisions on behalf of the company. The directors of large corporations might own a small fraction of the company. The entire board of directors might only control one percent of outstanding shares.
In smaller companies, the principal shareholders and directors of the company are almost invariably the same people. It is important to remember when electing directors to your company that you are giving them a large amount of authority over the affairs of the company….choose wisely!
What is registered agent service?
When a new business entity is formed it needs to be registered at a physical address within the state where it is domiciled. In addition, the company must be represented by an officially designated person, the registered agent.
The registered agent becomes the official point of contact between the Secretary of State and the company. Moreover, the registered agent is responsible for receiving official government notifications, including service of process and state tax documents, and passing them along to the company.
In states where a company has no physical address the use of a professional registered agent is mandatory. However, even in states where there is a physical address companies may want to consider using the services of a registered agent. A good agent may be instrumental in making sure the company stays in compliance and so is never at risk of losing the protections, both legal and financial, that a properly maintained legal structure provides.
Inc. Plan (USA) offers registered agent service. Click here to find out more.