Business Judgment Rule Explained

Summary

The business judgment rule prevents courts from interfering in corporate decisions made fairly and in good faith. An independent directors committee ensures decisions are not influenced by controlling shareholders. Minority approval means a transaction is approved if most non-controlling shareholders agree. Shareholders own company shares and have voting rights. Judicial review standards include intermediate scrutiny for reasonableness and heightened scrutiny for potential harm. Personal guarantees bypass limited liability by holding shareholders or officers accountable for company debts. Privacy laws protect against unauthorized evidence collection, such as seizing a spouses phone. Seek legal advice for specific concerns.