Do Directors serving at the pleasure of a specific class of investor owe fiduciary duties to other classes of investors? Suppose a company has five directors. Two appointed by holders of common stock and three appointed by holders of preferred stock. Do the directors appointed by the preferred stockholders have a fiduciary responsibility to all of the shareholders or just the preferred shareholders? That is, can they act in the best interests of the preferred stockholder without regard to the interests of the common stockholders.
Do the directors appointed by the preferred stockholders have a fiduciary responsibility to all of the shareholders or just the preferred shareholders? That is, can they act in the best interests of the preferred stockholder without regard to the interests of the common stockholders. The duties of directors of corporations are usually set out of the statutes of the jurisdiction where the corporation is organized, and in some jurisdictions, such as the State of Delaware, there is a very significant ability of corporate organizers to very the obligations of directors by agreement in articles of incorporation and bylaws. This said, the overwhelming majority position would be that a director elected by a particular subset of shareholders would owe the same legal duties to the corporation as a director elected by all of the shareholders at large. In other words, they have a legal duty to act in good faith in the best interests of the corporation. Sometimes these duties are full fiduciary duties, and sometimes these duties established by statute include duties of care and duties of loyalty that are narrower than the fiduciary duties owed, for example, by a trustee to the beneficiaries of a trust. Generally speaking, directors owe their duties primarily to the corporation as an entity overall, and not to the shareholders generally, or to any subset of shareholders. But, there is case law that provides the owners or directors of a corporation who control the corporation are not allowed to take actions using their voting and control powers that "oppress" the minority owners of the corporation. These duties arise even at the shareholder levels, despite the fact that shareholders aren't normally seen as owing duties, fiduciary or otherwise, to anyone. For example, suppose that a corporation is an S-corporation in which corporate income is taxable to shareholders whether or not dividends are paid, in which the majority shareholder has other assets from which taxes on the corporation income attributed to the majority shareholder can be paid, but the minority shareholders do not have other assets from which taxes on the corporation income attributed to them can be paid. Case law in many states has held to if the majority shareholder exercising either shareholder voting level rights or director level powers declines to distribute dividends in order to put pressure on the minority shareholders to sell out at a discount in this situation, that this constitutes official oppression by the majority controlling shareholder and violates the common law legal duties of the majority shareholder to the minority shareholders. The remedies available in these situations also varies considerably. Of course, as a practical matter, directors elected by a particular constituency are expected to be conscious of the particular needs of the people who put them in office and act accordingly, and this is rarely actionable. But, this is, in part, a function of the fact that the majority of corporations conduct all of their business with the unanimous consent of the directors on a day to day basis. Typically, voting disputes that divide directors into different camps happen only episodically in connection with major transactions like a takeover or leveraged buyout or proxy fight, not in the day to day conduct of the business of the corporation which is almost always left in the hands of senior management, in practice, if not always in legal formal terms.
In business dealings, you would have a contract with a company, not with its owner. The new owner inherits both the assets and liabilities of the company. It's up to the buyer of the business to do due diligence before buying the company. The old owner may escape obligations to clients and suppliers once the sale of the business is complete, but the new owner could sue the old owner for fraud. (It may be possible to escape some liabilities by declaring bankruptcy, but that's not the situation you described. One unethical accounting trick that a company can use is to split the company into two corporations such that one branch inherits the liabilities, and it go defunct.)
Yes, the role of a Representative is largely to serve as a point of contact for supervisory authorities and data subjects. Much of this could be done by a person who just scans and forwards any incoming mail. In practice, the Representative should be a lawyer or at least a compliance professional in order to fulfil their role effectively, in particular when it comes to a lawsuit or administrative proceedings against the controller/processor. These would be carried out against the representative on behalf of the controller/processor. Regarding liability, recital 80 explicitly says: “The designated representative should be subject to enforcement proceedings in the event of non-compliance by the controller or processor.” This doesn't shield the controller/processor from liability, this just simplifies enforcement and ensures that judicial remedies are in fact available to data subjects. There is a much more imminent consequence for the choice of Representative: which data protection agency will serve as main supervisory authority. Non-EU controllers might prefer the convenience of an English-speaking authority, otherwise (expensive) translation could be needed. Consequently, Representatives based in Ireland are effectively the default choice. Many representatives do offer extra services, such as offering to serve as a Data Protection Officer. That would help justify the fees. Unfortunately, the conditions for appointing a representative and for appointing a DPO are somewhat different: per the letter of the law many controllers would need a Representative but not a DPO. A Representative is needed as soon as data processing is non-occasional, whereas a DPO would only be needed for processing on a large scale. I'll just add that many controllers forget about that and only think about getting a representative when appointing a DPO. Since the Representative aids enforcement, enforcing against a controller without a Representative is rather difficult, and I don't know of any fines for failing to appoint a Representative.
There is certainly precedent. This list of the 10 biggest class action lawsuits in the world indicates that 8 of the 10 were by investors against their own company. In any event your analysis is flawed. The people who initiate the class action may (probably are) no longer be investors because they sold their shares and realised their losses. Further a legacy investor who didn't buy on the basis of the company's wrongdoing would not be entitled to damages. Finally, an investor who bought at say $100 on the basis of false information (like the cars were legal when the company knew they weren't) and now hold shares worth $40 will wait many years (if ever) to make good their losses: a lawsuit will be quicker and more certain.
Directors don’t own companies - they manage them Shareholders own companies. So, if you are a director and die, the legal upshot is you are no longer a director and the company may need to replace you in accordance with its rules. If you are a shareholder, then, subject to any other contracts like a option for the company or other shareholders to buy the shares of a deceased shareholder, the shares will be distributed in accordance with your will or the laws of intestate succession if you don’t have a will. Whoever owns the shares with have the same rights as you did.
When you buy a company you acquire all its assets and liabilities If the vendor wishes to retain some assets they need to buy them from the company; before, at the time of, or after the sale. The value of a company is its assets less its liabilities plus the present value of its future cash flows all adjusted for risk. If the company owns a fleet of motor vehicles then their market value is part of the assets (and any finance on them is part of the liabilities). If the managing director wants to keep their company car then they need to have it transferred to them and it won’t factor into the valuation That said, its usually only public companies (or large private companies on the verge of going public) that are bought. Because private companies have variable levels of management skill, there could be contingent liabilities no one knows about and a new owner is unlikely to want to take these on. Private companies usually sell their assets (including the “business”) to insulate the new owner.
Acme is bound by Bob's actions so long as they were conducted with "apparent authority" from the perspective of Client C and involved his work duties, even if he carried them out contrary to company policy - unless Client C knew for a fact that Bob was violating company policy and didn't have authority within the company to do so when he was doing these things. Acme, directly, or Acme's insurance carrier, in a subrogation suit after it has settled the claim from Client C, could probably sue Bob, especially if he willfully violated company policy for the purpose of harming client C. This is rarely done, but ultimately Bob owes duties to Acme which he violated which probably give rise to liability, although proving that and collecting the judgment would both be difficult. If Bob had authority within the organization to deviate from company policy, however, which he would have a good cause to claim that he did, this would be a full defense to such a suit, since Bob was always acting as a disclosed agent of Acme. Client C probably cannot sue Bob directly, whether or not it sues Acme. In contract matters (which this would include) a disclosed agent is not responsible for the acts he carries out on behalf of his principal. For example, an employee who signs a promissory note on behalf of a company in an official capacity as a disclosed agent of the company isn't responsible for paying the note. This is different than the rule in tort cases where the principal and anyone whose actions personally caused the tort caused the problem is liable. For example, if the employee got into a car accident that was his fault while he was driving on the job for the company, both the company and the employee would be liable to the person who was hurt. The circumstances that you describe sound more like a breach of contract than they do like a tort, so Bob would probably not have any personal liability to Client C. Could Bob or Acme (or both) face any criminal liability? Unless Bob was the CEO or other senior officer of the company, Acme wouldn't face criminal liability, because he is too far down the chain of command to cause Acme the entity to have the requisite criminal intent. Realistically, failing to "verify that equipment rental invoices match delivery records before notifying the client to approve the invoices for payment" does not amount to a crime no matter who does it. This might be careless or a breach of contract, but it is not fraud or theft because it lack the necessary criminal intent. If Bob actively photoshopped equipment rental invoices with a specific intent to defraud Client C, he would probably be criminally liable for fraud, although even that isn't an open and shut case as it still basically involves failure to perform a contract according to its terms and a mere breach of contract is generally not a crime unless you intended not to perform it in the first place, when you entered into the contract.
The law related to the internal organization of corporations is a matter of state law. You cite the correct authority: The board of directors of a nonprofit corporation shall consist of one or more members. The number of directors shall be fixed by or in the manner provided in the bylaws. If not so fixed, the number of directors shall be the same as that stated in the articles or three if no number is so stated. 15 Pa. Stat. and Consol. Stat. Ann. § 5723 (West). The statement of the state attorney general is merely a suggestion. Although, in an entity with audited financial statements the audited financial reports must disclose that the organization lacks &quot;adequate internal financial controls&quot;. But, non-profit entities such as charitable trusts or &quot;corporations sole&quot; (such as most legally distinct entities in the Roman Catholic Church) have only a single person with full control over everything that a Board of Directors does. The IRS likewise does not impose a minimum number of directors for a 501(c)(3) organization, or for any other kind of corporation. Nothing in the relevant statue requires that it have more than one, and many non-profits (e.g. probably a majority of churches) have only one director.