California PTA Laws Practice Exam

How are positions filled if a corporation has two shareholders?

1. President and treasurer are automatically chosen

2. The positions of president, vice president, secretary, and treasurer must all be filled

3. Only the president and secretary are needed

4. Positions are filled based on voting results

The correct answer is: The positions of president, vice president, secretary, and treasurer must all be filled

In a corporation with two shareholders, the governance structure typically requires the filling of certain key positions to ensure proper management and adherence to legal requirements. The positions of president, vice president, secretary, and treasurer each play distinct roles that are crucial for the operation of the corporation. These roles often include overseeing daily operations, maintaining corporate records, and managing financial accounts. In many jurisdictions, including California, corporate laws stipulate that there must be designated officers who fulfill these responsibilities. Although in small corporations, such as one with only two shareholders, roles can sometimes overlap, there is still a necessity to formally assign these positions to comply with legal obligations and to effectively manage the corporation's tasks and functions. This requirement ensures accountability and clarity in the management structure, which is essential for corporate governance. Thus, all positions need to be filled to correctly establish the framework within which the corporation operates, enabling it to function legally and effectively. The other options, while addressing various aspects of corporate structure, do not capture the comprehensive need for filling all specified officer positions.