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Corporate Governance Basics (Part 3): The Officers

Overview

Toronto corporate lawyer, Antonio DiMinno, of DiMinno Rizzi Lawyers, provides business owners a basic overview of the officers of a company and their legal & business functions. The officers of a company may have different powers depending on the size, culture, and nature of the company. Generally, however, they have the roles as set out below.

Who are the Officers and What do they do?

Typically, the directors of a corporation appoint officers, specify their duties, and delegate to them powers to manage the business and affairs of the corporation under their supervision.  New officers are generally elected by directors’ at annual meetings.

Officer powers and duties may vary from company to company, but the common factor is that they are basically high-ranking employees that manage the day-to-day operations of the company. They report to the board of directors and are commonly known as the “C-Suite” or “Executive” employees.

Generally, most corporations will have the following officers:

  • The Managing Director/Chairperson of the Board of Directors, who is head of the board and presides over all director meetings. The Managing Director also sets the agenda and goals for the company. The Managing Director must be a resident Canadian;
  • The Chief Executive Officer (CEO) or President, who is the top manager of the company’s operations, and reports to the Board. The CEO/President generally oversees all VPs, the Corporate Secretary, Treasurer and every other executive except the managing director. Oftentimes in smaller companies, the Managing Director and CEO/President are the same person.
  • The Vice-President (VP), who advises and reports directly to the President and may take the President’s place should he/she be unavailable. Depending on the company, there may be multiple VPs. VPs tend to have specific areas of expertise, such as legal, finance, business development, sales, or marketing
  • The Corporate Secretary, who administers decisions of the board, deals with logistics, and ensures legal compliance of all decisions; and
  • The Treasurer, who oversees the company’s finances.

 

Officers may also be directors of the corporation. The offices, duties, and term lengths of the officers are usually specified in the corporate bylaws, articles of incorporation, and directors’ resolutions. See Part 2 for more on the directors.

How an Ontario Business Lawyer Can Help

When starting a business or dealing with corporate governance, a good first step is to speak to a business or corporate lawyer and a corporate accountant.

Extreme care must be taken when drafting resolutions to ensure that officers have the legal authority to act. Many government departments, such as Canada Revenue Agency, Employer Health Tax, Workplace Safety and Insurance, and others can and do audit corporations.  All typically require a review of the minute book, which they expect will be up to date. 

A good business lawyer will work closely with a corporation’s accountant to ensure that all of the corporation’s ducks are in a row.

 

Antonio DiMinno

647-205-9128

antonio@drlawyers.ca

Contact us today for a free strategy session!

 

Disclaimer: All number figures are approximate only and may be subject to change. Like all material on this website, this is not financial, legal, or tax advice. Contact a professional for your specific situation. 

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