Anyone who wishes to form a corporation must prepare and file articles of incorporation with the Department of Financial Institutions.
Once the corporation is formed, owners of the corporation, called stockholders, contribute money, property, or services to the corporation and in return they receive stock representing their ownership in the corporation. The stockholders elect a board of directors who are responsible for managing the corporation’s affairs. The board of directors elects the corporation’s officers who run the corporation’s daily operations. The stockholders, directors, and officers may be, but do not have to be, the same people.
Since the corporation is an entity separate from its stockholders, directors, and officers, the corporation must observe certain formalities that are not required by a sole proprietorship or partnership.