I am more familiar with the way corporations work in Canada. However, there are a lot of similarities to that of the U.S. In Canada, companies are usually incorporated under the laws of a Province. In the US, companies are typically incorporated under the laws of a state. Each province has its own Companies Act, which represent the laws and regulations governing companies for that province. A company from another Province can register to do business in another province (i.e. extra-provincial registrations). Similarly, there would be laws for companies for each state, and under which companies get incorporated.
It is possible in Canada to incorporate a company federally rather than provinicially. I would think there would be something similar in the USA.
In Canada, when a company incorporates, they must get permission to use a certain name that is not being used by another company. Then they submit a package of documents referred to as the Articles and Memorandum of Association. Much of this is considered "boiler plate", since all companies typically have these same clauses, with certain amendments or exceptions being written into the Articles where permitted under law. Included in the package are also a few forms that must be registered with the Province, such as the Notice of Officers and Directors and the Registered and Records Office. These show who are the Principals behind the company, and the address of the company for service of documents. Typically, the registered and records office is at the office of the Attorney, where the minute book of the company is maintained.
The authorized share capital is part of the incorporation of the company, but this does not tell you what are the issued and outstanding shares of the members. To find this out, you have to visit the offices of the Registered & Records office of the company, and ask the attorney to see the minute book. You are allowed to make photocopies of the pages in the minute book, and they charge something like fifty cents a page or more.
Now, when it comes to Shareholder Agreements, and other agreements and obligations the company has entered into, you need to access the minute book to see them. Behind these documents or agreements you will typically find there are minutes of meetings of the Directors approving the contracts and commitments, with resolutions authorizing the Officers of the Company (typically the President) to enter into such contracts. and to take such actions, etc. Then there are typically annual general meetings of the Shareholders who appoint the Directors of the Company for the ensuing year (typically renewing the existing Directors for another term). The Directors have the responsibility for deciding the Policies and Philosophies and Direction of the Company. The Officers are responsible for the day to day management of the Company, in accordance with the instructions of and mandate from the Directors. Often it is the case that the Officers of the Company are also the Directors of the Company, and also the Shareholders of the Company. However, the Shareholders may have a vested interest in other corporations which have a vested interest in this particular company, and so they appoint a trusted individual(s) to sit on the board of this company to ensure it is being run in accordance with the other companies' interests.
Shareholders have the power to remove one or more directors of a company, and to replace them with someone else. Directors have the power to remove officers of the company. There are a number of strict legal procedures under company law that must be adhered to before removing such individuals who have certain rights. This includes properly constituted meetings with due notice, majority vote, etc. The Officers and Directors may also have contracts with the company, which could also invoke arbitration procedures, settlement conditions and amounts, and a host of other things. This can all get quite complex and costly where attorneys become involved with litigation and disputes.
Again, there are many similarities between Canada and the USA, but there are a lot of differences as well. A lot of rules have to be followed in order to start demanding documents and all that kind of thing. There are a number of documents that companies are not required to reveal to the general public.
Rod P.
