One area of constant concern in a corporation is self-dealing. Self-dealing takes many forms, and some may not even realize that they have engaged in such actions. The most common scenarios of self-dealing include transactions between the corporation and directors/officers; transactions between the corporation and a business entity in which directors or officers have significant...
Trembly Law
In many corporations, directors and officers bear the duties owed to the corporation, while being held accountable to the shareholders. In other corporations, including many closely-held corporations, some individuals may have authority due to the simple fact that they own a majority of the shares. These majority shareholders can essentially run the company because they...
In all forms of business, investors and owners come and go. In most situations, an owner’s liability does not cease, even when a successor has taken his place in the company. Often times, previous owners are still liable for liabilities that accumulated while with the company. Other times, a chain of events is set in...
Over the course of a partnership, many debts and costs accumulate. In many instances, a partner takes on these expenses on behalf of the partnership to ensure the business is running smoothly. However, it would be unjust to leave the partner solely on the hook for an expense accumulated on behalf of the partnership. That...
When attempting to attract capital, many corporations issue larger amounts of shares. As discussed in other posts, there are many types of stocks that can be issued, each with their own form of enticement. These include common and preferred stock. One additional feature of stocks that a corporation may consider in order to entice investors...
Directors and officers of corporations owe significant duties to the corporation and others within the corporation. Chief among these duties is the duty of loyalty. The duty of loyalty means that directors and officers must place the interests of the corporation ahead of their own. The most common scenario where the duty of loyalty is...
Corporations and limited liability companies (LLCs) are legally separate entities, distinct from their corporate shareholders and LLC members. As a result, the people who own or manage the business cannot typically be held liable for its debts. This immunity is not without limits, however: if a creditor sues for nonpayment of a debt and certain...
As a director or officer in a corporation, you owe the corporation and other individuals fiduciary duties. Owing fiduciary duties means that directors or officers have legal duties to place the interests of others or the corporation ahead of their own. One such fiduciary duty owed is the duty of loyalty, which means that the...