Besides obtaining funds from the sale of securities, a corporation may be financed by other sources. A bank may lend money to the corporation in exchange for the corporation's short-term promissory notes, called commercial paper. Retained earnings provide a source of funds once the corporation is operating profitably. In addition, the corporation may use normal short-term financing, such as accounts receivable financing and inventory financing. These two kinds of securities are called equity securities and debt securities.
Every business corporation issues equity securities, which are commonly called stock or shares .
Utah statutes permit corporations to issue several classes of shares and to determine the rights of the various classes. Subject to minimum guarantees contained in the state business corporation law, the shareholders' rights are a matter of contract and appear in the articles of incorporation and usually appear in the bylaws, in a shareholder agreement, and on the share certificates. Introduction Traditionally, the board of directors has had the power and the duty to manage the corporation. Therefore, the law permits a corporation to be managed under the direction of the board of directors. In theory, the board supervises the actions of its committees, the chairman, and the officers to ensure that the board's policies are being carried out and that the delegates are managing the corporation prudently.