How Do People Become Directors?

A corporation's first directors are generally those named on the initial government filing that is sent to the government body or department along with the corporation's Articles of Incorporation. These persons officially become the directors of the corporation as of the date mentioned on the corporation's Articles of Incorporation and they remain in office until they are re-elected, replaced, removed or resign.

Subsequent directors, also referred to as the "permanent directors", are elected by the shareholders. Unless there is a provision to the contrary in the corporation's Articles of Incorporation or By-Laws, shareholders typically elect the directors on an annual basis. At this time, the shareholders either re-elect the present directors for another term or elect new directors. If they remain qualified, directors can usually be re-elected for an indefinite period of time. The election of directors can occur at any given time during the year, but in practice, the election almost always takes place during the annual shareholders' meeting.

The election usually takes place by way of a ballot, unless there is a provision to the contrary in the corporation's Articles of Incorporation or By-Laws. In most cases, the corporation's By-Laws state that a ballot is only required if a shareholder present at the meeting to elect the directors makes a special request.

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