description of officer positions

Officer Position Descriptions

All companies must have at least one officer.  There are many officer positions and each of those positions comes with a standard set of duties and requirements, although duties can be varied.  Below is a list of the most common officer positions and a description of what duties and requirements come with the position.

If you require information about officers also refer to our articles called Officers Titles and Positions and Appointing Officers.

 

Chairman of the Board

  1. appointed by the board from among its members
  2. must be a director
  3. chairs all meetings of the board and presents all information and resolutions to the board for its review and decision at the meetings

Managing Director

  1. appointed by the board from among its members
  2. head of the directors and given the powers the directors wish him or her to have

President

  1. the top officer of a company
  2. if there is no Chairman he or she will Chair all meetings of the board
  3. all other officers report to the President
  4. reports directly to the board of directors
  5. oversees the entire operation
  6. does not have to be a director unless the By-laws indicate so
  7. if there is only one officer that officer should hold the position of President

Chief Executive Officer

  1. frequently the President is also the Chief Executive Officer
  2. position on par with the President
  3. reports directly to the board of directors
  4. there can only be one Chief Executive Officer (CEO)
  5. the Executive Vice-Presidents and Vice-Presidents report to the CEO and the President
  6. oversees the entire operation

Chief Financial Officer

  1. most senior financial officer that manages the financial records of the compan
  2. reports to the President and Chief Executive Officer
  3. provides the President, Chief Executive Officer and directors with the financial statements for their review and approval
  4. reports on the financial position of the company

Executive Vice-President

  1. reports to the President
  2. the duties are assigned by the President and/or Chief Executive Officer
  3. there can be more than one Executive Vice-President

Vice-President

  1. duties can be a variety including having a number of Vice-Presidents managing specific departments in a company including

Secretary or Corporate Secretary

  1. attends all meetings of directors and shareholders and records the meetings
  2. presents minutes of meetings to the directors, and shareholders for approval
  3. maintains and keeps up-to-date the minute book records for the company
  4. gathers, collates and organizes all documentation being presented to the directors by the other officers of the company for review at directors meetings

 

Treasurer

  1. if there is both a Chief Financial Officer and Treasurer the Treasurer prepares and maintains the accounting records for the company and presents the results to the Chief Financial Officer
  2. if there is no CFO, the Treasurer would prepare and present the financial statements to the directors for review and approval each year
  3. responsible for the safekeeping of securities and the disbursement of funds of the company

 

description of officer positions

Officers Titles and Positions

Officers are appointed by the directors of a corporation.  There are many different officers titles and positions that can be held by individuals.  The scope of this Articles is to explain the different positions and statute requirements relating to them.

For information about how to appoint, remove or resign an officer refer to appointing officers.

Officer Titles for Private Companies

A private company is a company which does not sell shares to the general public.  It is a company that is owned privately by one or more individuals or corporations.

The following are the customary and standard officer titles used by private companies:

President

Vice-President

Secretary

Treasurer

General Manager

These officers titles are the most popular and are limited to just a few because private companies frequently only have a few principals.  Frequently there will be one person who holds the position of sole director, officer and shareholder (owner).  In this situation he or she will normally hold the positions of President and Secretary.  In other cases there will be two people as principals of the company, one of which will hold the position of President and the other the position of Secretary.

The officers titles given to individuals in private companies do not always denote the functions they will handle. Sometimes these titles are given to individuals so each owner and director will also hold an officer position.  For instance if there are two principals then one will be the President and the other will be the Secretary.  If there are three individuals one may be the President, the other the Secretary and the third may be the Treasurer.  In the case of a fourth individual, this person may be appointed to a Vice-President position.

Officers Titles in Public Companies

In public companies the officers titles can be very different.  Frequently officers for public companies have more functions and duties and they may be supervising a department of a number of people.  Some of the common titles for public companies are:

Chairman or Chairperson of the Board

President

Chief Executive Officer

Chief Financial Officer

Executive Vice-President

Vice-President, Marketing

Vice-President, Technology

Corporate Secretary

Assistant Secretary

Assistant Treasurer

How Many Officers Must a Company Have

All companies in all jurisdictions must have at least one officer.  Normally if there is only one officer, the title that person will hold is President.

Officers Titles Can be Flexible

There is no set rule with respect to any title.  A company can designate officer titles that it wishes, however, it is always good to have a President and a Secretary.

Can a Person Hold More Than One Officers Title

Yes.  An individual can hold more than one officer position.   However, some officer positions can only be held by one person.  For instance, there is never more than one President, Chief Executive Officer, Chief Financial Officer, Secretary or Treasurer.  There may be any number of Vice-Presidents and any number of Executive Vice-Presidents.

Board Appointed Officers versus Non-Board Appointed Officers

The board of directors of a company may appoint only a certain number of officer positions that are being held.  For instance, three individuals may be owners of a company and all three of them have been appointed by the board of directors to hold those positions.  A meeting was held to appoint them or a resolution of all of the directors was signed to appoint them.  These individuals are called board appointed officers because of the manner in which they were appointed.

There may also be a General Manager or a Manager, Technology or a Manager, Office Supplies.  These positions may not be officially appointed by the board yet they are officer positions.  They would be considered non-appointed officer positions.

Public companies also may have non-appointed officers.  The larger companies will have many departments operating different services and functions.  They may appoint Vice-Presidents of those departments.  There could be hundreds of Vice-Presidents appointed.  The board of directors, in this case, would not appoint those Vice-Presidents.

Does an Officer Have to be a Director

In some cases there are certain officer positions which cannot be held by anyone unless that person is a director.  For instance, a Chairman or Chair or Chairperson of the Board and a Managing Director (depending on what the governing statute says) must be a director to hold those positions.

Most governing corporate statutes are vague with respect to officers, however, the best way to determine whether an officer position must be held by a director is to check the statute.  When a statute is silent on the issue there is no restriction.

As well, the by-laws of the corporation must also be reviewed.  Some by-laws are set up to provide that certain officer positions must be held by a director and even though there may not be a statute requirement, if the by-law indicates this then the company must abide by those by-law provisions.

If a by-law provides that an officer position must be held by a director but the statute does not say it is mandatory, then the by-law can be amended.  The statute will provide the method by which a by-law can be amended.  For Ontario companies refer to Ontario By-laws Enactment, Amendment and Repeal.

dividend resolution

Declaring a Dividend on Shares of a Company

Dividends are payments declared by the directors of a company which are paid to the shareholders (owners) of a private or public company out of the profits of that company.  When declaring a dividend the dividend must be declared equally to all shareholders of a class of shares and are paid out to each shareholder in proportion to the number of shares held.

When declaring a dividend, dividends can be paid as money, shares, warrants or property.

The directors of a company will pass a resolution at a meeting of the directors or by a resolution signed by all of the directors declaring a dividend to the shareholders of a specific class of shares.

Example of a Dividend Calculation

Below is an example of how a dividend is calculated and declared:

  • Declaring a Dividend in the aggregate amount of $10,000
  • The company has 2 shareholders with 100 issued and outstanding shares.
  • Shareholder #1 owns 40 shares.  Shareholder #2 owns 60 shares.
  • Shareholder #1 will receive $4,000 in dividend profits
  • Shareholder #2 will receive $6,000 in dividend profits
  • The dividend per share is equal to $100

Relevant Dates When Declaring a Dividend

  • The date the dividend is being declared payable.  Dividends cannot be declared payable in the past and this date must be either the same date of the resolution approving the dividend or for a future date.
  • The date upon which the shareholders of record is determined.  This provision comes into play more for public companies since shares for those companies regularly trade and the number of shareholders changes from day to day however even private companies must follow the same rules.  A record date must be determined when declaring a dividend and the only shareholders who would receive the dividend would be those who were shareholders of record on that particular date.  This prevents a shareholder who held shares in the company prior to the declaration of the dividend having a right to a dividend declared after he or she is no longer a shareholder.
  • The date of the directors resolution approving the dividend.  Frequently resolutions are left undated but it is very important when declaring a dividend to include the actual date the resolution was approved so that it is very clear that the dividend is being declared for a current or future date.

Which Classes of Shares are Eligible for Dividends

Common shares have the automatic right to receive dividends, however, preference or special classes of shares are only entitled to receive dividends if the Articles of the Corporation provide for it.   As well, there may be certain terms outlined in the Articles to be considered when declaring a dividend on special or preference shares.

 

Statutes Governing the Declaration of Dividends in Canada

Income Tax Act (Canada) deals with dividends in several different sections and it is a good idea to discuss dividends with your accountant before declaring them since there are tax consequences upon declaration of a dividend.

 

Approval for declaring a dividend is governed by the companies act or corporations act in each individual province or territory of Canada.  The various corporation statutes across Canada will provide either some or all of the following provisions:

A corporation shall not declare or pay a dividend if there are reasonable grounds for believing that (a) the corporation is, or would after the payment be, unable to pay its liabilities as they become due; or (b) the realizable value of the corporation’s assets would thereby be less than the aggregate of its liabilities and stated capital of all classes.

A corporation may pay a dividend by issuing fully paid shares of the corporation and a corporation may pay a dividend in money or property.

If shares of a corporation are issued in payment of a dividend, the declared amount of the dividend stated as an amount of money shall be added to the stated capital account maintained or to be maintained for the shares of the class or series issued in payment of the dividend.

Solvency Test When Declaring a Dividend

Most statutes will have a solvency test that must be met before any dividend is issued.    The company must not be insolvent and a dividend must not be declared if it would render the company insolvent thereafter.

Resolutions to Approve a Dividend

Example of a Resolution to Approve a Regular Dividend for Money:

“BE IT RESOLVED THAT a dividend in the aggregate amount of $** payable to the holder(s) of the issued and outstanding [common] shares in the capital of the Corporation is declared payable on [declaration date] to the shareholders of record of the Corporation as of [record date].

Any director and/or officer of the Corporation be and is hereby authorized and directed from time to time to execute and deliver all documents, agreements or other writings, whether under the corporate seal of the Corporation or otherwise, as may be necessary or advisable, and to sign for and in the name on behalf of the Corporation all such documents and writings and to take all such steps as in his or her opinion may be necessary or advisable for the purpose of giving effect to the foregoing.”

Certificates of Status for Canadian Companies

Example of a Resolution to Approve a Dividend for Property:

“BE IT RESOLVED THAT a dividend in the form of [described property] now registered in the name of the Corporation (the “Property”) is declared payable to the holder(s) of the issued and outstanding [common] shares in the capital of the Corporation.

Payment of the dividend shall be effected by transferring the Property now registered in the name of the Corporation to the holder(s) of the issued and outstanding [common] shares in the capital of the Corporation on [declaration date] to the shareholders of record of the Corporation as of [record date].

The amount of the dividend shall be equal to the fair market value of the Property, which is [$500,000].

Any director or officer of the Corporation is authorized and directed to do all things and executed all instruments and documents necessary or desirable to carry out the foregoing.”

Example of a Resolution to Approve a Dividend for Shares:

“BE IT RESOLVED THAT a dividend in the aggregate amount of $1,000 is hereby payable to the holder(s) of the issued and outstanding [common] shares in the capital of the Corporation on [declaration date] to the shareholders of record of the Corporation as of [record date],  such dividend to be paid and satisfied in full by the issuance to such holder(s) of the aggregate amount of [500] fully paid and non-assessable common shares.

The directors of the Corporation hereby determine that there shall be added to the stated capital account maintained for the [common] shares of the Corporation the amount of $1,000 in respect of the [500 common] shares of the Corporation issued in payment of the dividend declared.

Any one of the directors or officers is authorized and directed to do all things and execute any agreements or documents in order to effect the foregoing including the issuance of a certificate or certificates representing the [500 common] shares to the holders(s) of [common] shares of the Corporation.’

Declaring a Dividend[margin_25t]

Capital Dividends

These dividends are a different type of dividend and the rules are different.  This article is with respect to regular dividends only.  For more information about these dividends refer to Capital Dividend.

 

Buy Dividend Resolutions

If you wish to make things easy refer to this link for a number of templates that can be purchased relating to Approving Dividends Templates.

 

For more information about dividends refer to:

Capital Dividend

Capital Dividend Upon Redemption

Stock Dividend

Stock Dividends

Stock Dividend

Subject to the Articles, the directors of a corporation may declare and a corporation may pay a stock dividend by issuing fully paid shares of the corporation or options or rights to acquire fully paid shares of the corporation.

All shareholders of a corporation own shares.  When a dividend is declared upon a class of shares of a corporation all shareholders that hold shares of that class are entitled to receive the dividend equally in proportion to the number of shares they own.

To understand how these dividends are declared, consider the following scenario.  The directors of the Corporation approve a stock dividend on the issued common shares of a company on the basis of 10 common shares for every issued and outstanding share owned.  The corporation has the following shareholders:

John Doe (holding 10 common shares)

Jim Holding Company Limited (holding 20 common shares)

If a stock dividend is declared on the issued shares of a corporation providing for ten:one ratio, after the stock dividend is issued the additional number of shares each shareholder will own is:

John Doe (10 x 10) – 100 common shares

Jim Holding Company Limited  (20 x 10) = 200 common shares

The total number of shares owned by each shareholder including the original number of shares held and the additional shares allotted pursuant to the stock dividend are:

John Doe – 110 common shares

Jim Holding Company Limited  – 220 common shares

Subsequent to the approval of a stock dividend each of the shareholders having a right to the stock dividend shall receive a share certificate for the additional shares they received.

Below is an example of a directors resolution approving a stock dividend:

Stock Dividend

 

Buy Dividend Resolutions

If you wish to make things easy refer to this link for a number of templates that can be purchased relating to Approving Dividends Templates.

 

For more information about dividends refer to:

Declaring a Dividend

Capital Dividend

Capital Dividend Upon Redemption

 

Capital Dividend Upon Redemption

Capital Dividend Upon Redemption

Under certain circumstances, and provided the Articles of the Corporation provide, the directors of a Corporation may approve a deemed capital dividend upon redemption of a class of shares.

Redemption of Shares Resulting in a Capital Dividend upon Redemption

When shares are redeemed they are cancelled and, in some cases, returned to Treasury.  The Articles of a corporation set out the basis pursuant to which a class of shares can be redeemed and the amount of money those shares can be redeemed for.  If the Articles do not contain any provisions for redemption, the shares cannot be redeemed.

Statute Governing Capital Dividends Upon Redemption

Section 83 of the Income Tax Act (Canada) governs the basis upon which a capital dividend can be declared .  Refer to Section 83 of the Income Tax Act for more information on the legal requirements to be followed when declaring a capital dividend upon redemption.

Director Approval of a Capital Dividend Upon Redemption

The directors of a Corporation must approve a capital dividend upon redemption and a certified copy of such resolution must be filed with Revenue Canada Agency along with the election form.

Once issued shares of a corporation are redeemed, the share certificate evidencing those shares will be marked cancelled and the share register for those shares will be reduced by the number of shares redeemed.

Example of Directors Resolution Approving Capital Dividend Upon Redemption

Below is an example of a directors resolution approving a deemed capital dividend upon redemption:

 

Capital Dividend upon Redemption of Shares

Certified copy of Resolution of the Directors Approving a Capital Dividend upon the Redemption of Shares:

Capital Dividend upon Redemption of Shares

Many statutes will have a legal requirement which provides that a company cannot declare a dividend unless there are reasonable grounds it will be able to pay its liabilities.  Below is a form of confirmation of Solvency by the President of a company upon a redemption.

Solvency Certificate

Buy Dividend Resolutions

If you wish to make things easy refer to this link for a number of templates that can be purchased relating to Approving Dividends Templates.

 

For more information about dividends refer to:

Declaring a Dividend

Capital Dividend

Stock Dividend