Under the business judgment rule, directors may not be found personally liable to the corporation or third parties for their fraudulent acts if those acts were made on behalf of the corporation.

Question

Quizplus · Accepted Answer

The business judgment rule protects directors from liability for decisions made in good faith and in the best interest of the corporation, but it does not protect directors from liability for fraudulent acts, even if those acts were made on behalf of the corporation.

Under the Business Judgment Rule, Directors May Not Be Found