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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 ...
He held that the 'business judgment rule' was applicable. This meant, This meant, a presumption that in making a business decision, the directors of a corporation acted on an informed basis in good faith and in the honest belief that the action was taken in the best interests of the company.
The presumption of going concern for the business implies the basic declaration of intention to keep operating its activities at least for the next year, which is a basic assumption for preparing financial statements that comprehend the conceptual framework of the IFRS. Hence, a declaration of going concern means that the business has neither ...
Business transactions incur a strong presumption of a valid contract: these agreements where the parties deal as though they were strangers, are presumed to be binding. However, "honour clauses" in " gentlemen's agreements " will be recognised as negating intention to create legal relations, as in Jones v Vernons Pools [ 15 ] (where the clause ...
As such, the protection of the business judgment rule was unavailable. The Court stated, The rule itself "is a presumption that in making a business decision, the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company." ...
In law, a presumption is an "inference of a particular fact". [1] There are two types of presumptions: rebuttable presumptions and irrebuttable (or conclusive) presumptions. [2]: 25 A rebuttable presumption will either shift the burden of production (requiring the disadvantaged party to produce some evidence to the contrary) or the burden of proof (requiring the disadvantaged party to show the ...
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Business entity: assumes that the business is separate from its owners or other businesses. Revenue and expense should be kept separate from personal expenses. Going concern: assumes that the business will be in operation indefinitely. This validates the methods of asset capitalization, depreciation, and amortization. Only when liquidation is ...