The Delaware General Corporation Law is the statute governing corporate law in the U.S. state of Delaware. Originally adopted in 1899, it has been the most important jurisdiction in United States corporate law since the early 20th century. Over 50% of publicly traded corporations in the United States and 60% of the Fortune 500 are incorporated in the state.
Corporate law is the body of law governing the rights, relations, and conduct of persons, companies, organizations and businesses. The term refers to the legal practice of law relating to corporations, or to the theory of corporations. Corporate law often describes the law relating to matters which derive directly from the life-cycle of a corporation. It thus encompasses the formation, funding, governance, and death of a corporation.
The business judgment rule is a case law-derived doctrine in corporations law that courts defer to the business judgment of corporate executives. It is rooted in the principle that the "directors of a corporation... are clothed with [the] presumption, which the law accords to them, of being [motivated] in their conduct by a bona fide regard for the interests of the corporation whose affairs the stockholders have committed to their charge". The rule exists in some form in most common law countries, including the United States, Canada, England and Wales, and Australia.
In tort law, a duty of care is a legal obligation which is imposed on an individual requiring adherence to a standard of reasonable care while performing any acts that could foreseeably harm others. It is the first element that must be established to proceed with an action in negligence. The claimant must be able to show a duty of care imposed by law which the defendant has breached. In turn, breaching a duty may subject an individual to liability. The duty of care may be imposed by operation of law between individuals who have no current direct relationship but eventually become related in some manner, as defined by common law.
Directors and officers liability Insurance is liability insurance payable to the directors and officers of a company, or to the organization(s) itself, as indemnification (reimbursement) for losses or advancement of defense costs in the event an insured suffers such a loss as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers. Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors/officers simultaneously. Intentional illegal acts, however, are typically not covered under D&O policies.
The Supreme Court of Delaware is the sole appellate court in the United States' state of Delaware. Because Delaware is a popular haven for corporations, the Court has developed a worldwide reputation as a respected source of corporate law decisions, particularly in the area of mergers and acquisitions.
Regal (Hastings) Ltd v Gulliver[1942] UKHL 1, is a leading case in UK company law regarding the rule against directors and officers from taking personal advantage of a corporate opportunity in violation of their duty of loyalty to the company. The Court held that a director is in breach of his duties if he takes advantage of an opportunity that the corporation would otherwise be interested in but was unable to take advantage. However the breach could have been resolved by ratification by the shareholders, which those involved neglected to do.
In United States corporation and business association law, a duty of care is part of the fiduciary duty owed to a corporation by its directors. The other aspects of fiduciary duty are a director's duty of loyalty and (possibly) duty of good faith.
In re Caremark International Inc. Derivative Litigation, 698 A.2d 959, is a civil action that came before the Delaware Court of Chancery. It is an important case in United States corporate law and discusses a director's duty of care in the oversight context. It raised the question regarding compliance, "what is the board's responsibility with respect to the organization and monitoring of the enterprise to assure that the corporation functions within the law to achieve its purposes?" Chancellor Allen wrote the opinion.
In Plus Group Ltd v Pyke[2002] EWCA Civ 370 is a UK company law case concerning the fiduciary duties of directors, and in particular the doctrine concerning corporate opportunities. In the course of his appellate judgment, Lord Justice Sedley, sitting with Lord Justice Brooke and Lord Justice Jonathan Parker, cast doubt on the correctness of the contract law case, Bell v. Lever Bros
Foster Bryant Surveying Ltd v Bryant[2007] EWCA Civ 200 is a 2007 UK company law case, concerning the fiduciary duty of directors to avoid conflicts of interest. It follows some considerable unrest in the courts about the strictness of the law relating to taking corporate opportunities.
Directors' duties are a series of statutory, common law and equitable obligations owed primarily by members of the board of directors to the corporation that employs them. It is a central part of corporate law and corporate governance. Directors' duties are analogous to duties owed by trustees to beneficiaries, and by agents to principals.
The Charitable Corporation v Sutton (1742) 26 ER 642 is an important old English law case which holds in substance that a director of a company owes duties to the company in the same measure and quality as does a trustee to a trust. It makes the point that judges should not be quick to judge decisions of directors with hindsight.
United States corporate law regulates the governance, finance and power of corporations in US law. Every state and territory has its own basic corporate code, while federal law creates minimum standards for trade in company shares and governance rights, found mostly in the Securities Act of 1933 and the Securities and Exchange Act of 1934, as amended by laws like the Sarbanes–Oxley Act of 2002 and the Dodd–Frank Wall Street Reform and Consumer Protection Act. The US Constitution was interpreted by the US Supreme Court to allow corporations to incorporate in the state of their choice, regardless of where their headquarters are. Over the 20th century, most major corporations incorporated under the Delaware General Corporation Law, which offered lower corporate taxes, fewer shareholder rights against directors, and developed a specialized court and legal profession. Nevada has done the same. Twenty-four states follow the Model Business Corporation Act, while New York and California are important due to their size.
Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173, was a landmark decision of the Delaware Supreme Court on hostile takeovers.
Jerome William Van Gorkom was a United States businessman who was U.S. Under Secretary of State for Management 1982–83. He served as the CEO of TransUnion for eighteen years. Van Gorkom is probably best known as the named defendant in the landmark corporate law case of Smith v. Van Gorkom, 488 A.2d 858, which involved the merger of TransUnion with the Marmon Group in 1980.
In re Walt Disney Derivative Litigation, 907 A 2d 693 (2005) is a U.S. corporate law case concerning the scope of the duty of care under Delaware law. Disney is the leading case on executive compensation.
Canadian company law concerns the operation of corporations in Canada, which can be established under either federal or provincial authority.
In re Citigroup Inc Shareholder Derivative Litigation, 964 A 2d 106 is a US corporate law case, concerning the standard under Delaware law for the duty of loyalty among directors' duties.
Multinational Gas and Petrochemical Co v Multinational Gas and Petrochemical Services Ltd [1983] Ch 258 is a leading United Kingdom company law case relating to directors' liability. The case is the principal authority for the proposition that a company will not be able to make any claim against a director for breach of duty where the acts of the director have been ratified by the members of the company.
