This post discusses my surprise at finding that there apparently is no requirement that corporate officers be human beings.
My answer to a Quora question is the basis for this post. Please seeÂ Could an A.I. create a company and do all the functions typical of another company?
I was about to write an answer stating that corporate officers be natural persons (human beings). But with a bit of research, I found that apparently is not the case!
Generally, Corporate Directors Must be Human Beings…
Generally, corporate directors must be human beings (the legal term is “natural persons”). See, e.g.,
The board of directors of a corporation shall consist of 1 or more members, each of whom shall be a natural person.
“Directors” means natural persons designated in the articles
as such or elected by the incorporators and natural persons
designated, elected or appointed by any other name or title to act as
directors, and their successors.
However, it appears that some states permit legal entities to be directors (I will update this list if I learn about more such states):
- Alaska Statutes Section 10.06.210(3) states that articles of incorporation may include “the names and addresses of the persons appointed to act as initial directors”; Section 01.10.060(a)(8) defines “person”Â to include “a corporation, company, partnership, firm, association, organization, business trust, or society, as well as a natural person”.
…But Not So forÂ Corporate Officers (in Many States)
Much to my surprise (I had not thought about this issue before), I found no requirement that corporate officers be human beings.
Consider Delaware General Corporation Law Section 142(a). It refers to an officer being a “person,” but not a “natural person.”
Similarly, California Corporations Code Section 312(a)Â refers to an officer being a “person,” but not a “natural person.”
So, although I have never seen this, in these states a legal entity, represented by one of its authorized officers, could serve as an officer of a corporation.
Please note, however, that there are states where corporate officers must be human beings. These include, most notably, states that have based their corporate laws on a versionÂ of the Model Business Corporations Act.
- Section 8.40(b) states, in pertinent part, that “The board of directors may elect individuals to fill one or more offices of the corporation.”
- And Section 1.40(13) states that “‘Individual’ means a natural person.”
- Accordingly, in states that have adopted the MCBA (assuming that the relevant provisions thereof have not been modified), corporate officers must be natural persons.
Check out all posts about officers.
Dana H. Shultz, Attorney at Law +1 510-547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.