Vocabulary tasks

A Some of the important roles in company management are discussed in the text above. Which roles are mentioned?

B Here is a more comprehensive list of roles in company management. Match the roles (1- 10) with their definitions (a- j).

1 auditor 2 company secretary 3 director 4 liquidator 5 managing director 6 official receiver 7 promoter 8 proxy 9 receiver 10 shareholder

a person appointed by a shareholder to attend and vote at a meeting in his/her place when the shareholder is unable to attend b company director responsible for the day-to-day operation of the company c person elected by the shareholders to manage the company and decide its general policy d person engaged in developing or taking the initiative to form a company (arranging capital, obtaining personnel, making arrangements for filing corporate documentation) e person appointed by the company to examine the company’s accounts and to report to the shareholders annually on the accounts f company’s chief administrative officer, whose responsibilities include accounting and finance duties, personnel administration and compliance with employment legislation, security of documentation, insurance and intellectual property rights g member of the company by virtue of an acquisition of shares in a company h officer of the court who commonly acts as a liquidator of a company being wound up by the court i person appointed by creditors to oversee the repayment of debts j person appointed by a court, the company or its creditors to wind up the company’s affairs

Text b Company Formation

Lawyers play important roles in the formation of a company, advising clients which entities are most suited to their needs and ensuring that the proper documents are duly filed.

You are going to read a conversation between an American lawyer, Ms Norris, and her client, Mr O’Hara. The lawyer describes how a specific type of corporation is formed in the state of Delaware.

Ms Norris: So, based on all the background information you provided me with, my strongest recommendation is for you to incorporate for the reasons we discussed.

Mr O’Hara: All right. Of course, I trust your judgement. But I’m completely new to this. How does it work exactly? I mean, I assume that the paperwork has to be drafted by you and filed with the State…

Ms Norris: Well, um, let me begin by telling you about how the process works in our state, in Delaware. You know, quite a few large corporations choose to incorporate here due to our highly developed corporate legal system.

Mr O’Hara: Right. So what do we have to do first?

Ms Norris: The first thing you have to do is select a name — but the incorporator has to check whether that name is available in the State.

Mr O’Hara: The incorporator?

Ms Norris: That’s the person who prepares, files and signs the articles of incorporation and everything necessary for incorporation. Of course, that’s something I could do for you.

Mr O’Hara: Got it. Go on.

Ms Norris: Well, l mentioned the articles of incorporation: that’s the first main document that needs to be filed. It includes information like the name of the corporation, the address of the corporation and of the corporation’s registered office, and the name of the register agent at that office – um, that’s the person to be served if the corporation is sued.

Mr O’Hara: OK, right. Er, what else do the articles of incorporation include?

Ms Norris: They must state the purpose of the corporation and length of time that the corporation is to exist. The duration can be either perpetual or renewable, another thing you’d have to provide is information about the capital structure: how much common stock, how much preferred stock, and what are the rights and responsibilities of each. This would be stated in the stock ledger. The stock ledger and the stock certificates are kept with the company records. Any questions?

Mr O’Hara: Er, could you explain what a stock ledger is?

Ms Norris: Sure, that’s just a record of each shareholder’s ownership in a corporation.

Mr O’Hara: I understand. So, is that all? Are there any other documents we have to file?

Ms Norris: Of course, the other document necessary for the company to function as a corporation is the bylaws…

Mr O’Hara: Those are the rules of the corporation?

Ms Norris: Exactly: the bylaws are the rules and regulations adopted by a corporation for its internal governance. There’s one more thing: you’re also required to file the organizational board resolutions.

Mr O’Hara: What are those?

Ms Norris: Well, they’re drawn up after the articles of incorporation have been filed and the bylaws created. That’s the time when the first organizational meeting of your corporation will take place. At this meeting, the bylaws are then approved and adopted, officers are elected, and directors are appointed, among other things. All of these decisions are made during this meeting and then set down in the organizational board resolutions, and these resolutions are then filed. Then the incorporation process is complete.