As a business owner or executive, it is critical to understand your fiduciary responsibilities. A fiduciary duty is the legal obligation to act in the best interest of another party, and it applies to a wide range of business relationships arising from ownership of business as a shareholder, member, or partner, and as an employer, employee, officer and/or director of a business entity.
Failure to fulfill these duties can result in significant legal, ethical, and business consequences for both individuals and companies alike.
Navigating and understanding the scope of fiduciary duties can be complex, which is why business owners and executives should seek advice from an experienced business attorney for guidance. Let’s discuss what you need to know.
What is a Fiduciary Duty?
Business law in Florida governs the fiduciary responsibilities between different parties involved in a company, including employers and employees, shareholders, officers, and directors, among others.
These relationships are built on trust, transparency, and accountability. As such, all parties must understand their obligations to one another.
Fiduciary relationships are the cornerstone of business law.
- As a business owner, you have a legal and ethical responsibility to act in the best interests of your clients or customers. Under Florida law, business owners have specific fiduciary duties that include the duties of loyalty and care.
- Depending on the type of business entity, shareholders or members, the company’s owners, appoint directors or managers, who serve as fiduciaries for the company’s best interests. Directors and managers owe duties of loyalty and care towards the company and its owners by acting in good faith when making decisions related to the business operations.
A fiduciary owes the highest level of care to the person or entity they are serving, which is why a breach of fiduciary duty is considered one of the most serious violations under Florida law and most damaging conduct for businesses.
If a fiduciary breaches their duty of loyalty or care to the company or others to whom they owe the duties, legal remedies including money damages can be sought through claims asserted in a civil litigation action.
How to Avoid a Breach
It is essential for fiduciaries to understand their duties and responsibilities under Florida law. These include acting in good faith, with loyalty, and exercising reasonable care in all decisions that impact the company. Fiduciaries must act in the interests of the company and not in their own personal self interest.
How a Business Lawyer Can Support You
Hiring a business lawyer can be crucial to help understand the nature and scope of fiduciary duties owners, officers, and directors or managers owe to their companies in order to guard against breach.
With extensive experience in Florida business law, the business attorneys at The Frazer Firm can provide your company with the guidance necessary to ensure that fiduciary duties are fulfilled or to analyze and identify if the company has been harmed by and needs to assert claims for a breach of fiduciary duties. Our goal is to help your business identify potential breach risks before they occur, mitigate against future breaches, and enforce claims for breaches when they happen.
Contact The Frazer Firm P.A.
To help protect your business against a potential breach of fiduciary duty or to pursue legal remedies when they have already occurred, contact the business attorneys at The Frazer Firm for guidance and support.
Schedule a consultation and take the first step toward resolving your legal matter today.
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