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Directors and officers liability insurance (also written directors' and officers' liability insurance; [1] often called D&O) is liability insurance payable to the directors and officers of a company, or to the organization itself, as indemnification (reimbursement) for losses or advancement of defense costs in the event an insured suffers such a loss as a result of a legal action brought for ...
(7) A provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director: (i) For any breach of the director's duty of loyalty to the corporation or its ...
Trevor Ivory Ltd v Anderson is one of the leading New Zealand cases regarding the personal liability of company directors. The case concerns the personal liability of a director of a one-man company for negligent misstatement and applied the principle of Tesco Supermarkets Ltd v Nattrass that where a director is the "directing mind" of a company, his actions are legally those of the company.
Directors not required to hold stock; Officers/directors are protected from personal liability for lawful acts of the corporation; Corporations may purchase, hold, sell, or transfer shares of its own stock; Corporations may issue stock for capital, services, personal property, or real estate, including leases and options
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 [the] presumption, which the law accords to them, of being [motivated] in their conduct by a bona fides regard for the interests of the corporation whose affairs ...
Banks which lend money to corporations frequently contract with a corporation's directors or shareholders to get personal guarantees, or to take security interests their personal assets, or over a corporation's assets, to ensure their debts are paid in full. This means much of the time, shareholders are in fact liable beyond their initial ...
Corporations exist in part to shield the personal assets of shareholders from personal liability for the debts or actions of a corporation. Unlike a general partnership or sole proprietorship in which the owner could be held responsible for all the debts of the company, a corporation traditionally limited the personal liability of the shareholders.
Limited liability of the shareholders (a shareholder's personal liability is limited to the value of their shares in the corporation) Transferable shares (if the corporation is a " public company ", the shares are publicly listed and traded)