Business Judgment Rule Florida

However poor business judgment coupled with bad faith fraud illegality or oppressiveness will lead a court to disturb a board decision and hold directors personally liable.

Business judgment rule florida. You are expected to among many other things manage the company s affairs properly protect its interests guard it against competitors and generally. Stated another way the business judgment rule under florida law will adequately shield a director from potential liability no matter how poor his business judgment. Now it is mostly codified in florida statutes 607 0830 and 607 0831 and primarily in the latter 1.

The business judgment rule has been traditionally applied to protect corporate directors from personal liability. The rule presumes that a corporate director has acted in good faith and done so in the best interests of the corporation. However the presumption of correctness provided to directors under this rule is limited in nature under florida law.

As the owner manager majority shareholder or head level employee of a company you are expected to act in the company s best interest. The business judgment rule however is not absolute meaning directors are not automatically immunized from personal liability if they do not at in good faith as set forth below. In florida the business judgment rule offers a level of protection for directors from personal liability concerning a majority of their actions.

The court dismissed the claims against the individual board members and. Florida business litigation blog practice areas. Cont l country club r o inc former board members brought suit against the community association and the remaining individual board members.

Business litigation business torts. The rule evolved in florida from common law. A long standing doctrine of florida corporate law is the business judgment rule which states that directors are not liable for their business decisions and the actions of the board will be upheld if the directors discharge their duties in good faith and in the best interest of the corporation.

Florida s business judgment rule may protect you. This is one florida llc benefit. The business judgment rule today the business judgment rule is a principle of substantive corporate law that presumes a corporate director has acted in good faith.