What is the Business Judgment Rule?

A director will not be found personally liable for a breach of duty of care if he or she meets the requirements of the business judgment rule (“BJR”). Under the BJR, a court will not second guess a business decision that in hindsight turned out to be poor or erroneous if the director acted in good faith and exercised due caution.

Under California law, in discharging his or her duties “a director is entitled to…

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What is a Director’s Duty of Care?

Generally, a corporation’s articles may limit directors’ personal liability for money damages to a corporation or to its shareholders for actions taken or for failure to take action. However, the articles may not eliminate liability for a director’s breach of duties owed to the corporation. For example a corporation’s articles cannot eliminate liability for receiving financial benefits to which the director is not entitled, intentionally inflicting harm on the corporation or its shareholders, unlawful…

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What is a Breach of the Duty of Loyalty?

The relationship between an officer or director and a corporation gives rise to certain fiduciary obligations as a matter of law. One of the fiduciary duties that an officer or director owes the corporation is a duty of loyalty. The duty of loyalty requires every officer or director to act in good faith and with a reasonable belief that what he or she does is in the corporation’s best interest.

A classic example of a…

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What is a Fiduciary Duty?

A fiduciary relationship is about trust and confidence; it exists where one or more parties are bound to act in good faith toward and for the benefit of one or more other parties.  A fiduciary relationship is often comprised of the duties of care, loyalty, confidentiality, and obedience, i.e., fiduciary duties to the parties in the relationship.

Before a person can be charged with a fiduciary obligation, he or she or it must either knowingly undertake…

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Business Law and Cloud Computing

Every day more companies move towards cloud computing, but recent cyber-attacks have raised questions about security and reliability. Several other legal considerations have been raised, and it is therefore important for businesses considering this path to make sure to weigh the legal factors as well as cost benefits.

There are many reasons why companies are switching to cloud computing. According to the National Law Journal, some experts think that cloud computing could cut corporate IT…

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What is a Mechanic’s Lein?

A Mechanics’ Lien is a statutory remedy most often used by contractors and subcontractors.  Nearly anyone who contributes labor or materials to a real estate improvement project can use a mechanics lien as a mechanism to resolve issues with receiving payment.

 

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Alternative Dispute Resolution

The legal conflicts that businesses most often face are contract disputes, financial disputes, and employer-employee issues. If your business is facing such a conflict, it will be encouraging for you to know that most of these disputes can and are resolved without going to court. Alternative dispute resolution (“ADR”) can save your business a lot of time and money if you utilize it as a means to resolving your legal issues. There are many…

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Tips for Selling a Business in California

There are many reasons to consider selling a business, and there are just as many things to consider before and during the process. To streamline a sale, it would be helpful to be (or get) highly organized, making sure all assets are in order, the logistics of an exit strategy are in line, and all legal forms are squared away.

There will be a lot to do to prepare for the sale, so the best thing to do…

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Legal Considerations When Buying A Business

Buying a business requires a significant undertaking during which you will want to do your best to protect yourself and navigate around risks and hidden issues. This will include hefty market research, financial analysis, and of course legal advice.  Every transaction is unique, and there will be different considerations for different business types, but there are some general steps that each buyer should take when buying a business or assets.

Investigate Prior to Buying a Business

Once a buyer…

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Has Your Business Been Served?

If your business has been served with legal papers, it is important to act quickly, and determine whether you have been summoned or subpoenaed.

 

The information below…

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