How Corporations Work-2

At the initial stockholder or members meeting, the stockholder(s) or member(s) then elect the director(s) or voting member(s) of the company until the next annual stockholder(s) or member(s) meeting where the next set of directors or voting member(s) will be elected, and so on. A short time after the stockholder(s) or members initial meeting, the newly appointed directors or voting members have an initial director(s) or voting members meeting to elect the officers or managers who will actually run the company until the next annual meeting, and so on.

At the initial director(s) or voting member(s) meeting, many decisions about how the company will be run, are passed, the By-Laws or Operating Agreement are approved and perhaps a medical plan, education plan, legal plan, or cafeteria plan or employee benefit plan (not eating plan) are set up. Who will act as depositories, accountants, attorneys, resident agents approval, dividend expectations, etc., are also set up. The director(s) or voting manager(s) also decide when the fiscal year end will be, whether the company will be taxed with the aid of Subchapter "S" of the IRS code, and many other decisions about the direction the company will take.

This meeting is then adjourned until the next meeting, which at the very least should be once a year.
The benefits of being a stockholder or member of a limited liability company revolve around the advantages of owning a company with limited liability of the owners, unlimited life, centralized management, and free transferability of shares or memberships (unless its owners elect to be a "close" corporation). The ongoing benefits and limitations of stockholder(s) and member(s) are rights to dividends or distributions, a share of the assets at dissolution and usually a vote in the election of the directors or managing members who represent the Stockholder(s) or members interests in the company.