Which business form is governed by a board of directors?

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Multiple Choice

Which business form is governed by a board of directors?

Corporations are governed by a board of directors. In this structure, shareholders elect the board, and the board hires officers to run daily operations while overseeing major strategic decisions and protecting shareholders’ interests through fiduciary duties. This contrasts with partnerships, where partners directly manage the business, and with LLCs, which are typically owned and managed by members or by appointed managers rather than a separate elected board. An S corporation follows the same governance model as a C corporation, but exams often point to the corporate form as the clear example of board governance, represented here by a C corporation.

Corporations are governed by a board of directors. In this structure, shareholders elect the board, and the board hires officers to run daily operations while overseeing major strategic decisions and protecting shareholders’ interests through fiduciary duties. This contrasts with partnerships, where partners directly manage the business, and with LLCs, which are typically owned and managed by members or by appointed managers rather than a separate elected board. An S corporation follows the same governance model as a C corporation, but exams often point to the corporate form as the clear example of board governance, represented here by a C corporation.

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