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The Delaware General Corporation Law is flexible with respect to the type and number of officers a Delaware corporation must appoint.
The applicable portion of the Delaware Corporation Law provides that a Delaware corporation shall have “such officers with such titles and duties as shall be stated in the bylaws or in a resolution of the Board of Directors which is not inconsistent with the bylaws.” [source: corp.delaware.gov/DElaw.shtml]
Therefore, a corporation can create, by board resolution or through its bylaws, titles and positions for corporate officers that are as mundane or creative as it would like.
A corporation may also grant these officers whatever powers—and authority over company operations—that it deems necessary or appropriate.
There are no required officer positions or titles that a Delaware corporation must create, as opposed to a set of required titles in other states. Most Delaware corporate founders deem it prudent to have an executive officer, such as a Chief Executive Officer or President, as well as a Secretary.
The Secretary fulfills the requirement in the law that dictates an officer must be assigned to record the proceedings of stockholder meetings and Board of Directors meeting.
One person may hold multiple officer positions or be the only officer, as is often the case in the early stages of a start-up’s existence.
In recent years, particularly among tech companies and millennial-owned start-ups, creative (and sometimes downright silly) corporate officer titles have been used, including:
This creativity in titling can add an interesting and fun aspect to a corporation, but in a start-up or relatively early-stage corporation, it is often recommended to create clearly-defined officer positions that will convey a distinct meaning to both customers and potential investors. In fact, a corporation may have to produce a certificate of incumbency that clearly identifies each officer and his or her role in order to complete certain transactions, such as opening a bank account.
Therefore, while the title of “Tech Jedi” may be unique and alluring, “Chief Technology Officer” (or another, more recognizable title) may prove to be more sensible.
Customizing officer titles via unusual naming conventions can always be adopted once a corporation’s initial viability and business model have been proven, and growth is moving consistently forward.
Whatever titles are utilized, Delaware courts have held that corporate officers created at the board level, or through the bylaws, owe the corporation the same traditional fiduciary duties of care, loyalty and good faith as the members of the corporation’s Board of Directors.
Therefore, a corporate officer, particularly if he or she is not already on the Board of Directors, and therefore already subject to fiduciary duties, should become familiar with his or her fiduciary duties to the company and the resulting obligations.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
There are 3 comments left for Company Structure: CorporationStephen Lo said: Tuesday, June 16, 2020
Is there any requirement to report the change of director's particulars such as address or new passport number? If so required, to whom, when and how to report? Thanks.HBS Staff replied: Wednesday, June 17, 2020
A corporation must report the names and addresses of its directors to the State of Delaware on the corporation's Annual Report by March 1 of every year. This report is a snapshot as of that date, however, and need not show intra-year changes. Passport numbers do not have to be provided.Danan Coleman said: Saturday, February 4, 2017
Hey Brett, Good data. Thanks so much.HBS Staff replied: Tuesday, February 7, 2017
You are quite welcome! Glad you found the blog helpful!diego torres said: Thursday, February 2, 2017
Can we launch an LLC and then get stablished as a corporation for tax purposes? If we do so, could we decide that some of the shareholders will have passthrough and others won´t? Or it should be the same for all the shareholders? If some of the shareholders are non US residents, could we set up an S Corporation? Thank youHBS Staff replied: Tuesday, February 7, 2017
The IRS allows the LLC to be recognized as a corporation for the purposes of filing taxes. The LLC typically files Form 8832 with the IRS and elects to be recognized as a corporation. Typically, the taxation is for the entity and cannot be broken down to have each member of the LLC taxed with a different tax status.
For more clarification you may want to consult your accountant for assistance on what would be the best way to tax the LLC.