Corporate salaries are often featured in news stories and are usually so large that it's rather easy to locate accomplished professionals eager to compete for these positions. Yet questions often arise regarding a possible need to provide special compensation to corporate officers, members of the board of directors, and employees for attending different types of corporate meetings.
A corporate resolution is often proposed and then passed which sets forth all specific compensation that must be paid to various individuals. Although people who sit as members of a corporation's board of directors aren’t normally paid for their services, they are often paid to attend various meetings – and advanced funds to cover their travel expenses as needed.
Specific Designations for Corporate Officers
Under most state laws, the mandatory corporate offices that must be filled are: president, treasurer, and secretary. All other positions are optional, such as vice presidents and assistant officers. However, some state may choose different mandatory titles. Therefore, one state may require the president of the corporation to be called the “chairman of the board.”
Likewise, a treasurer may be referenced as a chief financial officer and a secretary might be simply referred to as a clerk. Yet there are always a few exceptions to these common requirements. For example, a few states may allow the corporate bylaws or a company’s board of directors to determine the exact number of officers named or appointed.
Various states add other requirements, such as only allowing a person to hold one position at a time – while others will let someone hold multiple positions. However, most states do not allow the same individual to simultaneously serve as president and secretary. Additional rules are common, such as state laws designating that at least one person must handle the duty of keeping highly accurate meeting minutes, as well as all corporate records and ledgers up-to-date.
In some states, you may be allowed to hire officers as “non-officer employees,” too.
Liability of Corporate Officers and the Board of Directors
The corporation's bylaws should clearly state under what circumstances the company's officers and directors will be extended full or partial immunity regarding various types of lawsuits. Normally, the corporation purchases a special insurance policy to help protect board members and officers from financial responsibilities tied to legal claims filed against the corporation. There should also be some statement regarding any corporate coverage available to cover attorney fees during the pendency of specific types of lawsuits.
To obtain help with handling all of your Georgia business planning needs, please contact Shane Smith Law today. You can schedule your free initial consultation with a knowledgeable Peachtree City estate planning attorney by calling: (770) 487-8999.