The Legal Minimum of People That Can Serve on a Board of Directors

A board of directors is a group of people who make major decisions about a corporation and how it runs. In general, the minimum number of people that have to serve on a board of directors is dictated by the laws of each state. Talk to a lawyer if you need legal advice about your state's board-of-directors requirements.

Board of Directors

In general, states allow corporations with at least one director, meaning you can form your own corporation and not have others who have to serve on the board. For example, South Carolina Code section 33-8-103(a) states that a board of directors has to consist of at least one person, but the bylaw can require any number of directors.

Organizations

Some states also require different kinds of corporations to have different number of directors that serve on the board. For example, South Dakota Code section 58-38-5 requires that any medical-or surgical-pan corporation have at least five directors serving on the board at any time. On the other hand, board of directors for water development districts have to have at least five, seven or nine directors, based on the size of the district managed, according to South Dakota Codifies Laws section 46A-3B-2.

Directors

Not only do state laws govern how many people have to serve on a board of directors, but they also determine who can serve as a director. For example, in a medical or surgical corporation in South Dakota, a majority of the directors have to be doctors or surgeons. These directors must also be contracted with the corporation to render medical or surgical services on its behalf to its subscribers.

Changing Number Of Directors

State laws also determine when and how a corporation can change the number of directors that serve on the board. In South Carolina, for example, South Carolina code section 33-8-103(b) states that all non-public corporations can, if authorized by its bylaws, increase or decrease the number of director by up to 30 percent. Otherwise, the shareholders have to approve a change in the number of directors greater than 30 percent