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  • Fiduciary Duties Chart 2017

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    Tina Kay
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    This document summarizes the fiduciary duties owed under corporate law, including the duty of care, duty of loyalty, and duties owed by majority shareholders to minority shareholders. It notes that directors and officers must act in good faith, on an informed basis, using the prudent person standard. They must also put the corporation's interests before their own. Majority shareholders have a duty to treat minority shareholders fairly and cannot use techniques like unreasonable salaries, dividend withholding, or exclusive stock purchases to benefit themselves.

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    Corporations

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    FIDUCIARY DUTIES CHART 2017

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    This document summarizes the fiduciary duties owed under corporate law, including the duty of care, duty of loyalty, and duties owed by majority shareholders to minority shareholders. It notes that directors and officers must act in good faith, on an informed basis, using the prudent person standard. They must also put the corporation's interests before their own. Majority shareholders have a duty to treat minority shareholders fairly and cannot use techniques like unreasonable salaries, dividend withholding, or exclusive stock purchases to benefit themselves.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    30 views1 page

    Fiduciary Duties Chart 2017

    Uploaded by

    Tina Kay
    This document summarizes the fiduciary duties owed under corporate law, including the duty of care, duty of loyalty, and duties owed by majority shareholders to minority shareholders. It notes that directors and officers must act in good faith, on an informed basis, using the prudent person standard. They must also put the corporation's interests before their own. Majority shareholders have a duty to treat minority shareholders fairly and cannot use techniques like unreasonable salaries, dividend withholding, or exclusive stock purchases to benefit themselves.

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    © All Rights Reserved
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    FIDUCIARY DUTIES OWED UNDER THE LAW OF CORPORATIONS

    DUTY OF CARE
    §§8.30/8.42 MBCA
    D/ O shall act in good DUTY OF LOYALTY DUTY OWED BY MAJ SH
    faith and in manner they D/O/Maj SH must put TO
    believe to be in best the interest of the corp MINORITY SH
    interest of corp*; as to before their own Majority SH owe a duty to
    being informed, prudent interest treat minority SH fairly
    person test

    Duty owed by Dir and Off Duty owed by D/O and Owed as stated above
    to Corp** Maj SH to Corp

    Business Judgment Examples: Maj SH cannot employ


    Rule 1. Must not usurp corp squeeze-out techniques
    Common law defense of opportunity such as:
    D accused of violating 2. Must not commit 1. Paying themselves
    duty of care. D enjoy waste exorbitant salaries
    presumption of sound 3. No unapproved self- 2 Unreasonable refusal to
    business judgment. D interested trans declare dividends
    must have acted w/o 4. No approvals of 3. Precluding Min SH
    conflict of interest, on unreasonable employment opportunities
    informed basis, and compensation or 4. Arranging exclusive stock
    belief that the act was in incentives purchases for themselves
    corp best interest

    * 8.42 adds that officers must act with care that person in like position in similar circ would act
    **Duty may extend to 3rd party in certain trust situations
    ©2017 Michael L. Chambers

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