Shareholders

The shareholders are the owners of the corporation. The corporation has a separate legal existence independent of the shareholder-owners and a shareholder is not liable to the corporation or its creditors with respect to the shares except to pay the consideration for which the shares were authorized to be issued or specified in the subscription agreement. Moreover, unless otherwise provided in the articles or certificate of incorporation, a shareholder of a corporation is not personally liable for the acts or debts of the corporation except that he, she or it may become personally liable by reason of his, her or its own acts or conduct (e.g., by entering into a guarantee or indemnification agreement with respect to obligations and other liabilities of the corporation to third parties). Shareholders generally delegate management and control of the corporation to the directors and officers, with the directors being elected by a vote of the shareholders; however, under common law and modern corporation law statutes shareholders are given certain rights to monitor their investment in the corporation, including the right to vote on certain matters and certain rights with regard to inspection of corporate records, including the charter documents, minutes of directors' and shareholders' proceedings, and specified books and records. In addition, shareholders have the right to bring both direct and derivative suits to protect their interests in the corporation. Finally, controlling shareholders may owe fiduciary obligations to the minority shareholders in exercising their control over the corporation, and all shareholders in a close corporation owe each other the same duty of utmost good faith and loyalty that is owed by partners to each other. Corporation law statutes provide procedures for shareholder meetings and actions taken by written consent without a meeting and provide for agreements among shareholders regarding assertion of their rights as shareholders, voting and transfer of shares