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Tampa Business Litigation Attorneys / Tampa Officers & Directors Attorney

Tampa Officers & Directors Attorney

Generally speaking, high ranking corporate officers and directors are not held personally liable for the actions or liabilities of a corporation. Simply put, the assets of officers and directors are not at risk due to their position in the company, even if a corporation engages in wrongdoing. However, there are still times when corporate officers and directors are exposed to risk and can be held personally liable. Below, our Tampa officers & directors attorney explains common scenarios in which liability can lie with executives.

Fraudulent Actions

Everyone is expected to act in a lawful manner, regardless of their position within a company or corporation. When officers and directors engage in unlawful activities, they can be held personally liable for their actions. In most cases, illegal behavior on the part of executives and directors takes the form of fraud. The shield that protects corporate officers and directors from liability is no longer in place when someone acts in an illegal manner. When a corporate official purposely lies to regulators, misleads investors, embezzles funds, or otherwise acts illegally, they can be subject to civil or criminal penalties.

Breach of Fiduciary Duty

In some instances, the officers and directors of a corporation can be held personally liable if they are negligent in their professional capacity. It is important to note that liability based on negligence is subject to a far higher standard than it is for illegal acts. This is due to the Business Judgment Rule in Florida. The Business Judgment Rule offers corporate officers and directors with a great deal of discretion. If corporate officers and directors make a decision and it was found to be reasonable in any capacity, they cannot be held liable for it, even if the decision was not entirely sound. Still, holding an officer or director liable for negligence is not impossible.

Misuse of the Corporation

Lastly, the officers and directors of a corporation can be found liable if a court ‘pierces the corporate veil.’ This is quite a drastic solution and courts will only do this when absolutely necessary. In order to pierce the corporate veil, the court must find that the shareholders of the corporation are trying to take advantage of the business structure. For example, if a court found that a corporation’s sole purpose was to act as a shell that protected shareholders from third parties such as creditors,  then the corporate veil may be pierced.

Call Our Officers and Directors Attorney in Tampa for Help with Your Case

Corporate officers and directors are provided with a great deal of protection when they are running and overseeing business operations. However, issues can still arise and when they do, they should always be handled as quickly and as efficiently as possible. At BBDG Law, our Tampa offices and directors attorney can review the facts of your case and help you resolve your issue in a manner that allows you to obtain the most favorable outcome. Call us now at (813) 221-3759 or contact us online to schedule a consultation and to learn more about how we can help.