Join us for a breakfast seminar as Dave Simmons shares his expertise and experience regarding the risks of serving as a company officer and implementing best practices for avoiding personal liability.
Best Practices for Corporate Governance and Dealings with Third Parties
Officers are responsible for the management and day-to-day operations of a business entity, whether the entity is a corporation, limited liability company, or some other form. The role of a corporate officer varies depending on the size and complexity of the organization, as well as the requirements imposed by company records such as by-laws and resolutions. Company officers are also governed by principles of common law agency and the provisions of the Indiana Business Corporation statute.
As a general rule, company officers are not personally liable for the actions they take in good faith on behalf of the company. However, the courts have found a number of exceptions to this general rule, where officers have failed to observe the required standards and to avoid fraud and injustice. In addition, company officers may be held personally liable under a broad range of statutes dealing with violations of criminal, tax and environmental laws.
Fortunately, there are “best practices” that a business can implement to mitigate the risk inherent to its company officers. These practices involve not only the proper observance of corporate governance requirements, but the careful monitoring of officer activities and the avoidance of actions that may result in significant risk.