Board of directors liability
WHAT IS A DIRECTOR?
Legal entities of all kinds are managed by directors acting collectively as boards of directors. The directors are elected by the shareholders of corporations or by the members of a not-for-profit organization. Other legal entities, such as cooperatives and co-ownership associations, may also be governed by managers acting in a capacity similar to directors.
WHAT IS THE ROLE OF DIRECTORS?
Boards of directors are the governing body responsible for managing and supervising the affairs of corporations. Board members have a duty to act honestly and in good faith, with care, diligence and skill, with a view for the best interest of the corporation.
In doing so, boards of directors must act in accordance with various rules as established by legislation, case law and private documents. Failure to observe these rules may result in the directors’ personal liability. In certain cases they must answer personally for the corporation failures, contraventions or offences.
WHY SHOULD YOU CHOOSE FORCE-LEGAL FOR YOUR NEEDS IN BOARD OF DIRECTORS LIABILITY?
The exercise of the powers conferred upon directors must therefore fall within the framework set by the relevant laws and regulations. The courts have often penalized directors who have been guilty of conflicts of interest or have not demonstrated sufficient skill, prudence or diligence in performing their duties.
This is why many boards of directors have sought advice from the Force-Legal team of business lawyers. Force-Legal’s expertise in business law and corporate law is a sure way for directors to limit risks. Our lawyers’ advice will help you take into account the sometimes contradictory requirements of the articles of the organization, its regulations, shareholder agreements, binding contracts and court decisions.
Our team of lawyers can provide valuable advice, as well as legal services, such as:
- • Advice on making major strategic decisions
- • Analyzing shareholder agreements and their impact on decision-making
- • Drafting resolutions using language that avoids legal pitfalls
- Managing conflicts between the business’s different beneficiaries
- Applying the appropriate governance rules to different contexts
- and more
Whatever your area of activities, one of our lawyers can meet all your needs regarding directors’ responsibilities. Contact us today!