Stockholders receive their stock from the corporation in exchange for money, property or services. To form a corporation, articles of incorporation must be filed with the state, bylaws and minutes of preliminary meetings must be drafted, and filing fees and expenses paid. The stockholders usually elect a small group of directors to set the corporation's policies. The directors then elect officers such as president, secretary and treasurer to carry out the normal business functions. In some cases, yes.
Risk is a fundamental aspect of every business.
So an owner must be aware of possible liabilities arising out of business operations. A sole proprietor, a partner of a general partnership and a general partner of a limited partnership are personally liable for all the debts of the business, including loans, accounts payable, defective products and employee accidents. Generally, the liability of limited partners, stockholders, and the members of an LLC is limited to what they have invested or committed to invest. Unlike corporate stockholders or members of LLCs, limited partners can lose their limited liability if they actively participate in the limited partnership's business. In addition, corporate stockholders and LLC members who have responsibility for managing compliance with certain types of laws, such as tax and environmental, can have personal liability if such laws are violated.