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LSDefine

Simple English definitions for legal terms

business judgment rule

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A quick definition of business judgment rule:

The business judgment rule is a protection for directors of a corporation. It means that as long as the director acted in good faith, with care, and in the best interest of the corporation, they cannot be held liable for violating their duty of care. This rule is a presumption in favor of the board, but it can be defeated if the director acted in gross negligence or bad faith, or had a conflict of interest. If the court finds that the rule applies, the burden of proof shifts to the plaintiff to prove otherwise. If the rule does not apply, the burden shifts to the board to prove that the transaction was fair.

A more thorough explanation:

The business judgment rule is a legal principle that provides protection to directors of a corporation from liability when they are sued for violating their duty of care to the corporation. This rule applies when the director's actions are made in good faith, with reasonable care, and with the belief that they are acting in the best interests of the corporation.

For example, if a director of a company decides to invest in a new product line, and the investment turns out to be unsuccessful, the director may be sued for violating their duty of care. However, if the director made the decision in good faith, with reasonable care, and with the belief that it was in the best interests of the corporation, the business judgment rule would protect them from liability.

The business judgment rule is a presumption in favor of the board, which means that courts will generally uphold the decisions of directors unless there is evidence of gross negligence, bad faith, or a conflict of interest. If the plaintiff can prove any of these factors, the court will not uphold the business judgment rule.

When the corporation pleads the business judgment rule, the burden of proof shifts to the plaintiff to prove that the rule does not apply. However, if the court finds that the rule does not apply, the burden shifts to the board to prove that the process and substance of the transaction was fair.

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Dkk
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Med law easy done
medicine is a scam
join the ethically ambiguous legal field instead
Dkk
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I want to meet an attorney that defends clients who run into flat earth problems. I want an attorney that knows and believes in flat earth theory.
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i want a flat earther for president. i want a guy who posts on 4chan for president. i want someone who mogs for president.
Dkk
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Exactly. My version of that awful poem.
Dkk
19:19
I can accept a president with maybe one or two of the poems traits hut good God, all of them??? No ty.
windyMagician
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president who respects sex is crazy
windyMagician
19:20
we had bill clinton already
Dkk
19:21
Bill Clinton, first and last black president
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it doesn't hurt its just tingly
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It needs more alcohol. You tingle when your nerves need watering.
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try stretching it maybe to see what's up
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stretches make me think it's just soreness
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I'm sober lol
Dkk
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Anyone else get the google notification that your LSD password has been compromised lol. LSD got hacked.
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what.jpg @Dkk
CynicalOops
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You think you just fell out of a coconut tree?
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nope dk
CynicalOops
22:37
Calvinamala Harris
jackfrost11770
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should i start using letterboxed again
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@jackfrost11770: if you want but like it aint for me
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