Is it legal for profit corporation board of directors to serve as employees?

Question

Is it legal for profit corporation board of directors to serve as employees?

Answer 1

Absolutely. And in many smaller corporations this is a common arrangement. The situation comes to pass when an individual or group decide to form a corporation instead of a sole proprietorship or partnership. As owners of the corporation of course they would be involved in the governance of the business. Yet with many small corporations these same people are also workers.

An owner in a proprietorship or partnership takes payment for his/her service as a draw.

An owner in corporation takes payment for his/her service as wage. And any business profits come as either interest payments or dividends.