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...
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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...
Depending on the type of business you own, different Florida statutes will govern. Without knowing what law applies to their business, many business owners may be violating the law or failing to live up to the requirements of the state without realizing it. Different rules will govern depending on the applicable statute, and therefore the...
Prior to 1934, only common law fraud dealt with insider trading. However, in 1934, the federal Securities and Exchange Commission unveiled a comprehensive scheme to combat the issue. This was followed up with the SEC Act of 1943. This Act’s section 10(b) has created the most comprehensive scheme used to deal with insider trading. Today,...
By definition, a contract is any verbal or written agreement that creates legally enforceable obligations between two or more parties. Although Florida law treats verbal contracts as legally binding (except under certain circumstances), the risks may outweigh the benefits when it comes to business agreements, as the terms can be difficult to prove. To create...
When deciding upon issuing stocks, there are many considerations to take into account. These include the classes of stock to issue, as well as voting rights. But one often overlooked stock character is the types of restrictions to place on them. Many corporations wish to see that their shareholders remain stable and predictable. Therefore, they...
When deciding how to finance your corporation, there are many considerations to take into account. For example, you may quickly realize that you wish to finance the corporation by issuing shares. But did you consider what rights would go along with those shares? Did you decide what types of shares they would be? These important...