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operations of the corporation. Officers areagents of the corporation, and principalagentrules apply.If the directors have decided to purchasea new business site, the corporation’s officerswould have authority to arrange thedeal. This might involve a number ofdetailed steps, such as hiring an appraiser,employing an attorney, ordering a titlesearch, and other tasks.Like directors, officers are subject to theduties of loyalty and due care. Each officer’sduties are generally spelled out in thecorporation’s by-laws. Managing a corporationcan become complex because keyfigures often play more than one role.Often, directors are also officers and shareholdersof the corporation.ShareholdersCorporations need money, called capital, which is obtained by sellingunits, or shares, of stock in the company. If you buy one or more shares,you become a shareholder (also called a stockholder), a member ofthe corporation.Shareholders are sometimes called owners or investors in the corporation.It would be a mistake to use one label without the other, however,because shareholders of a corporation are really both owners and investors.Shareholders are often individual people, but not always. A corporationcan also be a shareholder in another corporation. General andlimited partnerships can be shareholders in a corporation, and so canlabor union retirement funds or a state workers’ pension funds.CORPORATEMANAGEMENTMost corporations aremanaged by a board ofdirectors elected by theshareholders. What is therelationship between theboard of directors and theofficers of a corporation?Shareholder RightsOwners of stock in a corporation acquire certain rights. These rightsinclude the following:l The right to receive dividends as declared by the board of directorsl The right to receive and possess a stock certificatel The right to have ready access to the corporate recordsl The right to transfer all sharesl The right to maintain a proportionate share of stock in thecorporation (preemptive rights)l The right to exercise a vote for each share of stock ownedChapter 29: Operating a Corporation 627