MEE CORPORATIONS

Question 1

Business Judgment Rule

Answer 1

the BJR is a rebuttable presumption that a director’s decision may not be challenged if (1) they acted in good faith, (2) acted with the care that a person would exercise in a similar position, and (3) acted in a manner reasonably believed to be in the best interest of the corp

think GF (like girlfriend bc in relationship with corp), SP like simp for the corp, and BIOC best interest of corp

Question 2

what information can directors usually reasonably rely on?

Answer 2

information from experts or uninterested parties with knowledge

Question 3

self interested transaction with director rule

Answer 3

a transaction will not be set aside just because a director had a personal interest in the transaction IF they disclose material facts of the transaction to the disinterested members of the board or shareholders who approve the transaction

Question 4

what liability can a corporation’s articles of incorporation eliminate?

Answer 4

the articles of a corp may limit or eliminate a director’s personal liability for money damages too shareholders or cop for actions taken
EXCEPT if the directors:
(1) received a benefit that they weren’t entitled
(2) intentionally inflicted harm on the corp or shareholders
(3) approved unlawful distributions
OR
(4) intentionally committed a crime