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When you initially set up your company, you might start with a very ‘select’ (read: small) team. Hopefully with time and increasing success, you’ll start to introduce more players in your team to handle the huge amount of work you have flowing in. Though you may not have need for all the key players below, it’s pretty important at the very least to know who they are and what they do. Unless running around like Madison Avenue yelling “Now who the hell are you?!” is your jam (early 2000s dance music fans for the win).
So roll call!
1. Shareholders or Members
The terms ‘shareholder’ and ‘member’ are interchangeable, and they form the basic foundation of the company. They will own a part of your precious business, funding it through buying shares, in the hopes that one day you’ll return the favor to them by generating a return on their investment. Like all civilized things, members are assigned to different classes of shares (link share class doc), each with certain rights and benefits.
1A - Majority Shareholder
Every company’s share structure is different and there’s no right or wrong way about it. If you decide to have a majority shareholder, they will usually own 50% or more of the issued shares in a company. The majority shareholder usually is the founder (at least in the startup world), and this player has a big influence on company decisions and directions.
1B - Minority Shareholder
A minority shareholder will normally own less than 50% of the company’s shares. They can come in many shapes and forms; friends, employees, fangirls, your mother etc.
It is important to note that you don’t necessarily have to have a majority and minority shareholder, you can distribute the shares equally or however which way you want to roll.
Come on down Tarantino! The director (or directors, which are a part of the ‘Board of Directors’ of a company) is appointed by the shareholders and manages the company’s day to day business. These guys are the ones that sign, seal and deliver on all of the company’s dealings. There are a tonne of obligations and responsibilities placed on directors, many of which are found in the Corporations Act 2001 (Cth) and which have been the subject of many cases. Generally speaking though, directors must always act in good faith and in the company’s best interest.
My kind of person - the chairperson of the board of directors. This is the homeboy that oversees board meetings, making sure everything runs smoothly, effectively (e.g. setting the meeting agenda, keeping everyone on track) and at times to make sure that the directors aren’t going at each other’s necks with pointy sticks. A chairperson can also be nominated to carry the deciding vote (‘casting vote’) when there are deadlocks during decisions. The chairperson is chosen by the board of directors and can either be one of the directors themselves or an independent person with some kind of relevant qualifications. Note that a board normally isn't legally obliged to appoint a chair, but it's usually considered good practice to do so (especially at the bigger end of town).
4. Company Secretary
The company secretary is an ‘officer’ of the company - they can play a useful role but it is not strictly necessary to have a company secretary. The responsibilities allocated to the company secretary often include administering company affairs, advising directors on the company’s best practice corporate governance requirements, knowing the duties of the director, preparing board meeting agendas and taking minutes. A company secretary can sign legal documents on behalf of the company together with another director (check out section 127 of the Corporations Act 2001 (Cth)).
A few important supporting actors:
Mr Chief Executive Officer, the big dawwwwwwwwg. Usually the CEO is also the founder or director, but this doesn’t have to be so. Their main duties are to develop strategies for growth and success, manage operations and communicate with the board of directors.
As the ‘Financial’ in Chief Financial Officer suggests, this role overlooks the entire financial activities related to the company. These include budgeting, managing cash flow and analyzing company figures, in order to plan any changes that must be made to strengthen the company’s financial position. A CFO is best served with motivating tunes such as Pink Floyd’s “Money”, Barrett Strong’s classic “Money” or ABBA’s “Money, Money, Money”.