Public Corporation

BOD

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Sub5Public companies often own (directly or indirectly) subsidiaries, which are separate legal entities through which the company mayown property and/or operate its business. Subsidiaries may be domestic (U.S.) or foreign.

Shareholders Debtholders

Shareholders are membersof the public who own thecompany. Most shareholdershave the right (a) to elect the members of the BOD who oversee the management of the company, and (b) to vote on major company actions (e.g., the acquisition of another company). Shareholders’ shares become more valuable as a company earns profits.

Debtholders lend money to thecompany in exchange forinterest payments. Debtholdersmay include unsecured lenders (e.g. bondholders) or securedlenders (e.g., banks who havemade loans to the company). Debtholders do not own the company.

The Board of Directors (BOD) of a public company oversees the management decisions of the company and owes fiduciary duties to the shareholders. Members of the BOD are usually also shareholders, but this isn’t legally required.

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