What are the legal liabilities of corporate directors?

Corporate directors are responsible for making decisions on behalf of a California corporation. As such, they have a legal duty to act in the best interest of the company and its shareholders. This is called a fiduciary duty. Fiduciary duties may include the duty of care, the duty of loyalty, and the duty of obedience. The duty of care requires corporate directors to be diligent in making decisions, such as by researching and considering all facts and circumstances before making decisions. The duty of loyalty requires directors to place the interests of the corporation ahead of their own interests. The duty of obedience requires directors to act within the scope of their authority and abide by the law. In addition to fiduciary duties, corporate directors also have other legal liabilities. For instance, they might be held liable for any breaches of their fiduciary duties. Directors may also be held personally liable for any acts of misconduct or negligence, such as entering into contracts without authority or failing to follow the procedures of the corporation. Finally, directors can be held liable for any decisions they make that cause financial harm to the corporation, such as spending excessively or making investments without proper due diligence.

Related FAQs

What is a LLC?
What are the requirements to maintain a corporation?
What are the different forms of ownership in a corporation?
What are the environmental laws and how do they affect corporations?
What is the best way to finance a corporation?
What is the role of external counsel?
What is the role of corporate accounting?
What is a reverse merger?
What is a reverse stock split?
What is a corporate bond?

What are the legal liabilities of corporate directors?

Related FAQs

Related Blog Posts