Which business form has day-to-day operations managed by officers who are appointed by directors elected by shareholders?

Which business form has day-to-day operations managed by officers who are appointed by directors elected by shareholders?

• A. Sole Proprietorship
• B. Corporation
• C. Limited Liability Company
• D. Partnership

Answer: (B)

In a corporation, ownership is held by shareholders who elect a board of directors. That board then hires and oversees the officers—such as the CEO, CFO, and COO—who manage the daily operations of the business. This separation of ownership (shareholders) from control (directors who appoint officers) is the defining structure that allows daily decision-making to be run by appointed executives rather than by the owners themselves. This setup doesn’t fit sole proprietorships, where the owner runs the business directly; nor partnerships, where the partners themselves typically manage operations; nor LLCs, which can be member- or manager-managed without a separate board elected by shareholders to appoint officers.

In a corporation, ownership is held by shareholders who elect a board of directors. That board then hires and oversees the officers—such as the CEO, CFO, and COO—who manage the daily operations of the business. This separation of ownership (shareholders) from control (directors who appoint officers) is the defining structure that allows daily decision-making to be run by appointed executives rather than by the owners themselves.

This setup doesn’t fit sole proprietorships, where the owner runs the business directly; nor partnerships, where the partners themselves typically manage operations; nor LLCs, which can be member- or manager-managed without a separate board elected by shareholders to appoint officers.