A breach of fiduciary duty complaint is much easier to prove than fraud as there's no need to prove fraudulent or criminal intent. To win a breach of fiduciary duty complaint, the claimant only has to prove that you were in a fiduciary position and you breached that duty for your own personal gain.
How to Avoid a Breach of Fiduciary Duty
One way to avoid breaching your fiduciary duties is to ensure that Board Resolutions are created each and every time a major decision is made by the board of directors or shareholders on the company's behalf. Resolutions can serve as a record of the choices the directors and shareholders have made.
It's also important to understand the basics of fiduciary duty so that you know what's to be expected of you, and what actions might be in breach of your duty. Understanding and avoiding prohibited transactions (e.g. those that would benefit you personally or adversely affect the company) will also help you avoid breaching your duties.
Please note: This page offers general legal information, not but not legal advice tailored for your specific legal situation. Rocket Lawyer Incorporated isn't a law firm or a substitute for one. For further information on this topic, you can Ask a Legal Pro.
