female consultant standing at conference table in business meeting
Posted November 07, 2022

Appointing a Board of Directors

If you’ve decided to form a corporation, congratulations to you! You’re on the right track to protecting yourself and taking your business more seriously. But the work’s not done yet. One of the steps you’ll need to do in the incorporating process is to appoint a Board of Directors.

By law, your corporation must have a Board of Directors to represent it and to make decisions on behalf of shareholders. The number of members required will vary from state to state. For example, if you incorporate in California, you’re required to have at least one Board member.

Having more can be advantageous, as it’s your Board of Directors that will help you make decisions about your company. Together, you can determine your business’ path for:

  • Strategic growth
  • Issuing shares
  • Raising prices
  • Adding new products

You’ve got a few options when it comes to who you’ll invite to join your Board of Directors. You can choose from among your employees if you think they’re a good fit for making high-level executive decisions.

If you don’t have people who fit the bill on your team, look elsewhere. Some ideas for potential Board members:

  • Former employees
  • Mentors
  • Past clients
  • Networking contacts
  • Friends

Essentially, you want a Board of Directors that is well-versed in areas you are not as adept in. This keeps the Board well-rounded and capable of making balanced decisions. Imagine a Board entirely made up of accountants. The decisions would be much different than one with people of varying skills!

But what if you’re a one-man or woman show? Who should your Board consist of? Technically, you only need one person on your Board of Directors to incorporate, so you can serve as the Board, or you can look in your network to find people to help you make the decisions.

You will need to disclose your Board members in your corporation paperwork, and you’ll also be required to hold annual Board meetings to keep compliant as a corporation. At each meeting, you’ll need to take minutes and submit those with your corporation paperwork each year.

Selecting your Board of Directors is just one of the steps toward your future as a corporation!

<a href="https://www.corpnet.com/blog/author/nellieakalp/" target="_self">Nellie Akalp</a>

Nellie Akalp

A pioneer in the online legal document filing space since 1997, Nellie has helped more than half a million small businesses and licensed professionals start and maintain companies across the United States, most recently through her Inc.5000 recognized company, CorpNet. She closely follows trends in the industry and shares her wealth of knowledge across various CPA and small business communities, establishing Nellie as one of the most prominent influential experts on business startup and compliance matters.

Explore More Blog Posts

Delaware LLC Franchise Tax

Delaware LLC Franchise Tax

Delaware is known as a business-friendly state for such reasons including its lack of residency requirements, favorable tax structures, legal flexibility, privacy protections, and other advantages. A less friendly aspect of having your LLC based in Delaware is its...

State of Colorado Periodic Report

State of Colorado Periodic Report

All Corporations, Limited Liability Companies (LLCs), Non-Profit Corporations, and foreign entities registered to conduct business in the State of Colorado must file a periodic report each year with the Colorado Secretary of State’s Business Division. The intent of...

When to Incorporate a Startup

When to Incorporate a Startup

If you’ve been operating your business as a Sole Proprietorship, you may be wondering when’s the right time to incorporate your startup as a bona fide business entity. There are various reasons to consider incorporation and its important to know your timing can...

Subscribe to Newsletter

Practical business and financial insights, lessons, perspectives, and know-how brought right to your inbox.

Thank you for subscribing!

100% satisfaction guaranteed or we will refund 100% of our service fees with no questions asked!