July 14, 2021
Individuals who serve as officers and directors of a Michigan corporation owe fiduciary duties to shareholders of the corporation. Fiduciaries are individuals whom the corporation either employs as an officer or whom the shareholders of the corporation duly elect to serve as a director. Directors are individuals who have the authority to act on behalf of the corporation’s shareholders.
In the State of Michigan, directors and officers of a corporation have a legal duty to act in the shareholders’ best interests. When directors and officers fail to do this, they may have breached their fiduciary duties. Birmingham breach of fiduciary lawyer Maxwell Goss of Maxwell Goss Law can assist you with resolving a breach of fiduciary duty dispute, and if necessary, with litigating the dispute in court to a favorable conclusion.
There are several types of fiduciary duties that are applicable to corporate officers and directors in Michigan. Some of these fiduciary duties can be found in Michigan’s common law. Other duties, however, are from the Michigan Business Corporation Act. The most common types of fiduciary duties owed by corporate directors and officers to the shareholders of a corporation include the following:
In some instances, the Business Judgment Rule may be applicable to the officers and directors of a corporation. Under the Business Judgement Rule, these individuals may not be responsible for every single bad decision that they make during the time when they are working for the corporation. In order for a corporate officer or director to escape liability, he or she must have made an informed decision, acted in good faith, and honestly believed under the circumstances that the authorized action or actions were in the corporation’s best interests.
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July 14, 2021
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