Business Judgement Rule Definition

Unless it is apparent. The business judgment rule 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.

Independent Directors Functions Responsibilities

A rule of law that provides corporate immunity to directors of corporations protecting them from liability for the consequences of informed decisions made in good faith.

Business judgement rule definition. Business judgment rule law and legal definition business judgment rule is a legal principle that makes officers directors managers and other agents of a corporation immune from liability to the corporation for loss incurred in corporate transactions that are within their authority and power to make when there is sufficient evidence to show. A legal principle which grants directors officers and agents of a company immunity from lawsuits relating to corporate transactions if it is found that they have acted in. Legal definition of business judgment rule.

Defining the business judgment rule. The business judgment rule rule the most prominent and important standard of judicial review under corporate law protects a decision of a corporate board of directors board from a fairness review entire fairness under delaware law unless a well pleaded complaint provides sufficient evidence that the board has breached its fiduciary duties or that the decision making process is. Pinning down an exact definition of the business judgment rule bjr is a difficult task.

On the contrary the bjr is something that corporate managers use every day. A regulation that helps to make sure a corporation s board of directors is protected from misleading allegations about the way it conducts business. The business judgment rule is a standard of judicial review of corporate director and officer conduct.

The directors and officers of a corporation are. Nthe legal doctrine that a corporation s officers and directors cannot be liable for damages to stockholders for a business decision that proves unprofitable or harmful to the corporation so long as the decision was within the off. 3 as corporate responsibilities are typically governed by state law there is no one uniform definition of the business judgment rule that applies throughout the country.

Business judgment rule definition. This is not because the phrase and its meaning are not daily part of the directors and officers management of the company. A legal principle that makes officers directors managers and other agents of a corporation immune from liability to the corporation for loss incurred in corporate transactions that are within their authority and power to make when sufficient evidence demonstrates that the transactions were made in good faith.

The presumption raised by the business judgement rule may be rebutted by the plaintiff.

Https Www Jstor Org Stable 40687058