State laws typically require that the shareholders hold an annual meeting. For more on this, see Section F, Step 12. The directors manage the corporation and make major policy decisions. The incorporators or shareholders decide how many directors the corporation will have. The number of directors is usually stated in the articles of incorporation or in the corporate bylaws.
Most states specifically permit corporations to have just one director.
In the remaining states, the requirement is that there be at least three directors, but there's an exception for corporations with fewer than three shareholders. They choose Anita to be the sole director. They can do this because the law in Michiganas in many other statespermits a corporation to function with a single director regardless of the number of shareholders. Dustin, Erwin and Faye create a corporation in California. Therefore, Dustin, Erwin and Faye create a three-person board of directors and appoint themselves to those positions.