Directors’ Liabilities and Responsibilities

In certain cases, corporate officers and directors may be exposed to certain liabilities in their capacity as a director or corporate officer. Officers and directors can always be held personally liable for wrongful acts, even if that conduct is expressly within the scope of their employment. More specifically, the Florida Statute provides for corporate officers and directors’ liability in three different circumstances including:  

• Fraudulent acts. Corporate officers and directors can be held liable when they engage in illegal activities, especially violations of criminal law. Usually, the illegal activity corporate officers and directors engage in is fraud. The corporate liability shield does not protect those who participate in criminal or fraudulent acts. Corporate officers and directors may be liable for criminal or civil liabilities if they engage in misleading investors, lying to regulators, embezzling funds or willfully committing other unlawful acts. 
• Breach of fiduciary duty. Corporate officers and directors acting in professional capacity may be held liable for negligence breach of duty of care or duty of loyalty. 

• Misuse of corporate form. Corporate officers and directors may be liable in cases the courts decide to pierce the corporate veil. Courts are reluctant to pierce the corporate veil and do not do so with ease. However, courts may agree to pierce the corporate veil when they believe that the stakeholders are intentionally trying to take advantage of the corporate form. In the case of a shell company the courts are likely to pierce the corporate veil and hold the officers and directors personally liable for the debts and acts of the company.  

Contact us or schedule a consultation with our business attorney in Miami, Florida, USA to provide advice and support regarding Directors’ liabilities and responsibilities, conflict of interest transactions and related party transactions.