Explain the change in Ownership and its control

Question

Explain the change in Ownership and its control?

Answer 1

The existence of the corporation is unaffected by the death or withdrawal of a shareholder. Shareholders are free to sell their shares to someone else, subject to certain requirements that may be set out in the articles of incorporation (i.e., the consent of majority of directors). For small companies, it may be hard to find a market for the shares.

Control: An elected board of directors has authority to make all decisions. The board, in turn, delegate’s responsibility for managing the corporation to the officers they appoint. Shareholders elect a board by a majority vote. Beyond that, they do not participate in ownership. In a small corporation, however, shareholders are often also officers and directors.