Many people prefer to operate as a limited liability company since their liability is limited to the capital contribution of its shareholders. Customers or suppliers also take some organizations seriously when operating as a company. There are two main forms of companies that entrepreneurs can establish namely public and private companies. Certain documents are needed by the relevant registrar of companies before it can commence operations. There are two very important documents which such firms cannot be issued with a trading license without. These are articles of incorporation and memorandum of association. In DC articles of incorporation spell out the internal relations in such firms. They have different clauses each of them describing how certain issues are to be handled.
The election or appointment of directors should be strictly regulated to ensure they meet the selection criteria. In addition, the clauses should also describe the term of service and the procedure and circumstances of removal from office. Companies are governed by the board of directors and their powers must be under the control of shareholders through their shares which have voting power.
A share represents a unit of ownership to a company. There should be a clear description of the rights that a shareholder has with respect to the organization. This eliminates incidents of some of the shareholders taking advantage of others for their personal benefit since such shareholders can file a case against those who breach such regulations.
Shareholders should be notified about meetings which they are expected to attend. Such notification should also be accompanied by the agenda of the meeting and minutes of previous meeting. This makes it formal and professional and eliminates incidents of some owners not being invited to important meetings which they are expected to participate in decision making.
The manner in which meetings are to be held should also be described therefore eliminating huge deviations from the norm. This sets a good organizational culture which also creates a sense of belonging for all shareholders since directors do not conduct meetings whichever way they deem fit. This also makes it difficult to skip some important issues since everything is done procedurally.
The manner in which shares are transferred in private and limited companies are quite different since private ones only allow ownership to change among existing shareholders while in public companies, shares can be transferred to the public. The minimum and maximum shareholding should also be clearly stated to ensure incidents of violation are eliminated.
Firms should have a clear structure on the manner in which voting in such firms is to be held. Some firms have a policy whereby each share represents a potential vote. On the other hand, there are those which advocated for one vote per shareholder. Some voting is done through secret ballot while others do it by a show of hands.
In DC articles of incorporation are meant to provide guidance in conducting internal affairs in companies. When these documents are very comprehensive, they eliminate incidents of conflicts associated with some people not following the rules. The continuity of such firms is also not compromised due to wrangles.
The election or appointment of directors should be strictly regulated to ensure they meet the selection criteria. In addition, the clauses should also describe the term of service and the procedure and circumstances of removal from office. Companies are governed by the board of directors and their powers must be under the control of shareholders through their shares which have voting power.
A share represents a unit of ownership to a company. There should be a clear description of the rights that a shareholder has with respect to the organization. This eliminates incidents of some of the shareholders taking advantage of others for their personal benefit since such shareholders can file a case against those who breach such regulations.
Shareholders should be notified about meetings which they are expected to attend. Such notification should also be accompanied by the agenda of the meeting and minutes of previous meeting. This makes it formal and professional and eliminates incidents of some owners not being invited to important meetings which they are expected to participate in decision making.
The manner in which meetings are to be held should also be described therefore eliminating huge deviations from the norm. This sets a good organizational culture which also creates a sense of belonging for all shareholders since directors do not conduct meetings whichever way they deem fit. This also makes it difficult to skip some important issues since everything is done procedurally.
The manner in which shares are transferred in private and limited companies are quite different since private ones only allow ownership to change among existing shareholders while in public companies, shares can be transferred to the public. The minimum and maximum shareholding should also be clearly stated to ensure incidents of violation are eliminated.
Firms should have a clear structure on the manner in which voting in such firms is to be held. Some firms have a policy whereby each share represents a potential vote. On the other hand, there are those which advocated for one vote per shareholder. Some voting is done through secret ballot while others do it by a show of hands.
In DC articles of incorporation are meant to provide guidance in conducting internal affairs in companies. When these documents are very comprehensive, they eliminate incidents of conflicts associated with some people not following the rules. The continuity of such firms is also not compromised due to wrangles.
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