The owners of the Swim City cooperation are Jonathan, Gary and Ricardo, who are considering incorporating their business. The sole owners are those who come together to be founders of a specific corporation.
Once the businesses are incorporated, the overall management of the day to day activities falls on the board of directors. A corporation works as a single entity different from what the founders have in mind. Moreover, after coming to form one corporation then there are shareholders who invest in the business who are part owners of the whole company. The shareholders elect the board of directors, who then formulate policy decisions and are responsible for hiring corporate officials and employees.
Directors of a corporation refer to a selected individual from a group of selected persons who oversees the running of different sections of the corporation. To be a director, one is selected by the shareholders depending on the personal ability to produce efficient results.
The day to day operation of a corporation is overseen by the board of directors who are responsible for policy formulations and directions. Just like any other business, the shareholders have a lot to lose or gain in terms of interests or profits. Thus, the boards of directors who are appointed are there to oversee all programs run smoothly and protect the shareholder’s interests. However, the boards of directors only formulate policies; the implementation relies upon the employees who make sure the company run smoothly.
A key employee or an officer is a person within a corporation with substantial influence over the operational activities. Qualifications for being a key employee or officer are dependent on the qualifications and reliability in terms of doing a specific job. In a corporation, each employee is tasked with different roles. The ability to produce results in specific roles depends upon the qualifications for specific activities, thus a person is only put in a specific position if he or she meets the requirements.
Being the sole owners of the Swim City business, the three partners need to maintain ownership interest if they decide to incorporate. There are instances where the owners are booted out of their own corporations by shareholders. To maintain ownership interest, an agreement is put on the table that restricts shareholders from undertaking certain actions. However, stipulations in place are that instances when the owners are perceived to work for their own personal benefits, the shareholders have the power to remove the owners from their sit, but they maintain a position on the board. After deciding to incorporate, there is the question of maintaining ownership interests.
The operations of the business as a partnership is a responsibility of all the general partners and they also assume liability of the changes and possible liabilities that include the debts and other liabilities that the company assumes. If they incorporate the business, the three will not be considered liable for the liabilities of the company. Instead, the business will assume the liability and the shareholders will not be considered as the ones to be involved in settling the liabilities.
In the case of a tort case, the three partners are considered as the owners of the company and; therefore, the afflicted party in the tort case will have the option of suing the perpetrator or the afflicting party or partner in this case. Therefore, the afflicted party will sue the partner who caused them harm.
On the other hand, when the business is incorporated, when an employee of the organization is working on a project contracted to the organization, the organization becomes liable for all the actions of the employee. As such, in the case of tort, the company will assume the liability of damages and settle the issue from a perspective of the organization rather than the afflicting party who is an employee of the organization.