|
Duty Of Loyalty
The duty of loyalty is often called the cardinal principal of fiduciary relationships, but is particularly strict in the law of trusts. In that context, the term refers to a trustee's duty to administer the trust solely in the interest of the beneficiaries, and following the terms of the trust. It generally prohibits a trustee from engaging in transactions that might involve self-dealing or even an appearance of conflict of interest. Furthermore, it requires a fiduciary to deal with transparency regarding material facts known to them in interactions with beneficiaries. Duty of loyalty in corporation law to describe a fiduciary's "conflicts of interest and requires fiduciaries to put the corporation's interests ahead of their own."''Corporations.'' Fifth Edition. Examples and Explanations. Alan R. Palmiter. ASPEN. New York. p. 192. "Corporate fiduciaries breach their duty of loyalty when they divert corporate assets, opportunities, or information for personal gain." It ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Fiduciary
A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person. One party, for example, a corporate trust company or the trust department of a bank, acts in a fiduciary capacity to another party, who, for example, has entrusted funds to the fiduciary for safekeeping or investment. Likewise, financial advisers, financial planners, and asset managers, including managers of pension plans, endowments, and other tax-exempt assets, are considered fiduciaries under applicable statutes and laws. In a fiduciary relationship, one person, in a position of vulnerability, justifiably vests confidence, good faith, reliance, and trust in another whose aid, advice, or protection is sought in some matter... In such a relation, good conscience requires the fiduciary to act at all times for the sole benefit and interest of the one who trus ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Transparency (behavior)
As an ethic that spans science, engineering, business, and the humanities, transparency is operating in such a way that it is easy for others to see what actions are performed. Transparency implies openness, communication, and accountability. Transparency is practiced in companies, organizations, administrations, and communities. For example, in a business relation, fees are clarified at the outset by a transparent agent, so there are no surprises later. This is opposed to keeping this information hidden which is "non-transparent". A practical example of transparency is also when a cashier makes changes after a point of sale; they offer a transaction record of the items purchased (e.g., a receipt) as well as counting out the customer's change. In information security, transparency means keeping the arcane, underlying mechanisms hidden so as not to obstruct intended function—an almost opposite sense. It principally refers to security mechanisms that are intentionally undetectable ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Business Judgment Rule
The business judgment rule is a case law-derived doctrine in corporations law that courts defer to the business judgment of corporate executives. It is rooted in the principle that the "directors of a corporation... are clothed with hepresumption, which the law accords to them, of being otivatedin their conduct by a bona fide regard for the interests of the corporation whose affairs the stockholders have committed to their charge".''Gimbel v. Signal Cos.'', 316 A.2d 599, 608 (Del. Ch. 1974) The rule exists in some form in most common law countries, including the United States, Canada, England and Wales, and Australia. To challenge the actions of a corporation's board of directors, a plaintiff assumes "the burden of providing evidence that directors, in reaching their challenged decision, breached any one of the triads of their fiduciary duty — good faith, loyalty, or due care". Failing to do so, a plaintiff "is not entitled to any remedy unless the transaction constitu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Duty Of Care (business Associations)
In United States corporation and business association law (particularly Delaware law and the Revised Model Business Corporation Act), a duty of care is part of the fiduciary duty owed to a corporation by its directors. The other aspects of fiduciary duty are a director's duty of loyalty and (possibly) duty of good faith. Put simply, a director owes a duty to exercise good business judgment and to use ordinary care and prudence in the operation of the business. They must discharge their actions in good faith and in the best interest of the corporation, exercising the care an ordinary person would use under similar circumstances. Directors' decisions are typically protected under the business judgment rule, unless they breach one of these duties or unless the decision constitutes waste. A breach of fiduciary duty will typically remove a director's decision from business judgment protection and require that the director show entire fairness. Waste Directors have a duty not ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Model Business Corporation Act
The Model Business Corporation Act (MBCA) is a Model Act promulgated and periodically amended by the Corporate Laws Committee of the Business Law Section of the American Bar Association (Committee). The MBCA had been adopted by 36 states and other jurisdictions. The MBCA provides a modern body of statutory corporate law that is regularly updated by the Committee based on judicial decisions, recent legislative enactments and other legal and technological developments. It is a well-organized and clearly-written statute for business (stock) corporations that covers a number of areas, including formation, governance and director conduct and liability. The MBCA has been influential in shaping standards for United States corporate law. Benefits of the MBCA The MBCA has three principal benefits. First, by distilling many matters into black-letter law, it provides guidance on issues that have often been the subject of dispute and litigation (e.g., directors’ duties). This can promote c ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Corporate Opportunity
The ''corporate opportunity'' doctrine is the legal principle providing that directors, officers, and controlling shareholders of a corporation must not take for themselves any business opportunity that could benefit the corporation. The corporate opportunity doctrine is one application of the fiduciary duty of loyalty. Application The corporate opportunity doctrine does not apply to all fiduciaries of a corporation; rather, it is limited to directors, officers, and controlling shareholders. The doctrine applies regardless of whether the corporation is harmed by the transaction; indeed, it applies even if the corporation benefits from the transaction. The corporate opportunity doctrine only applies if the opportunity was not disclosed to the corporation. If the opportunity was disclosed to the board of directors and the board declined to take the opportunity for the corporation, the fiduciary may take the opportunity for themself. When the corporate opportunity doctrine appli ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Materiality (law)
Materiality is the significance of facts to the matter at hand.Black's Law Dictionary, 7th ed. In the law of evidence An item of evidence is said to be material if it has some logical connection to a fact of consequence to the outcome of a case. Materiality, along with probative value, is one of two characteristics that make a given item of evidence relevant. This largely depends on the elements of the cause of action the plaintiff seeks to prove, or that the prosecutor must prove in a criminal case to secure a conviction. Which issues must be factually proven are therefore a product of the underlying substantive law. In corporate and securities law Within the context of corporate and securities law in the United States, a fact is defined as material if there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote their shares or invest their money. In this regard, it is similar to the accounting term of the same name. Ma ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Conflict Of Interest
A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates to situations in which the personal interest of an individual or organization might adversely affect a duty owed to make decisions for the benefit of a third party. An "interest" is a commitment, obligation, duty or goal associated with a particular social role or practice. By definition, a "conflict of interest" occurs if, within a particular decision-making context, an individual is subject to two coexisting interests that are in direct conflict with each other. Such a matter is of importance because under such circumstances the decision-making process can be disrupted or compromised in a manner that affects the integrity or the reliability of the outcomes. Typically, a conflict of interest arises when an individual finds themselves occupying two soc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Equity (law)
Equity is a particular body of law that was developed in the English Court of Chancery. Its general purpose is to provide a remedy for situations where the law is not flexible enough for the usual court system to deliver a fair resolution to a case. The concept of equity is deeply intertwined with its historical origins in the common law system used in England. However, equity is in some ways a separate system from common law: it has its own established rules and principles, and was historically administered by separate courts, called " courts of equity" or "courts of chancery". Equity exists in domestic law, both in civil law and in common law systems, and in international law. The tradition of equity begins in antiquity with the writings of Aristotle (''epieikeia'') and with Roman law (''aequitas''). Later, in civil law systems, equity was integrated in the legal rules, while in common law systems it became an independent body of law. Equity in common law jurisdictions (gener ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Self-dealing
Self-dealing is the conduct of a trustee, attorney, corporate officer, or other fiduciary that consists of taking advantage of their position in a transaction and acting in their own interests rather than in the interests of the beneficiaries of the trust, corporate shareholders, or their clients. According to the political scientist Andrew Stark, " self-dealing, an officeholder's official role allows her to affect one or more of her own personal interests." It is a form of conflict of interest. Self-dealing may involve misappropriation or usurpation of corporate assets or opportunities. Political scientists Ken Kernaghan and John Langford define self-dealing as "a situation where one takes an action in an official capacity which involves dealing with oneself in a private capacity and which confers a benefit on oneself." Examples include "work ngfor government and us ngyour official position to secure a contract for a private consulting company you own" or "using your gove ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Trust Law
A trust is a legal relationship in which the holder of a right gives it to another person or entity who must keep and use it solely for another's benefit. In the Anglo-American common law, the party who entrusts the right is known as the " settlor", the party to whom the right is entrusted is known as the "trustee", the party for whose benefit the property is entrusted is known as the " beneficiary", and the entrusted property itself is known as the "corpus" or "trust property". A ''testamentary trust'' is created by a will and arises after the death of the settlor. An ''inter vivos trust'' is created during the settlor's lifetime by a trust instrument. A trust may be revocable or irrevocable; an irrevocable trust can be "broken" (revoked) only by a judicial proceeding. The trustee is the legal owner of the property in trust, as fiduciary for the beneficiary or beneficiaries who is/are the equitable owner(s) of the trust property. Trustees thus have a fiduciary duty to manage t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
