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Fiduciary Duties, Exculpation, and Indemnification in Texas Business Organizations
This article discusses fiduciary duties, some history regarding fiduciary duties in Texas, and fiduciary duties with respect to LLCs.
Fiduciary Duties, Exculpation, and Indemnification in Texas Business Organizations
Statutory developments beginning in the 1990s have impacted the analysis of fiduciary duties in the Texas business organizations context. The duties of general partners are now defined by statutory provisions that delineate the duties without referring to them as “fiduciary” duties and specifically provide that partners shall not be held to the standard of a trustee. Whether limited partners in a limited partnership have fiduciary duties is not well-settled, but the Texas Business Organizations Code (BOC) clarifies that a limited partner does not owe the duties of a general partner solely by reason of being a limited partner. While the fiduciary duties of directors are still principally defined by common law, various provisions of the corporate statutes are relevant to the application of fiduciary-duty concepts in the corporate context. Because limited liability companies (LLCs) are a relatively recent phenomenon and the Texas LLC statutes do not specify duties of managers and members, there is some uncertainty with regard to the duties in this area, but the LLC statutes allude to or imply the existence of duties, and managers in a manager-managed LLC and members in a member-managed LLC should expect to be held to fiduciary duties similar to the duties of corporate directors or general partners. In each type of entity, the governing documents may vary (at least to some extent) the duties and liabilities of managerial or governing persons. The power to define duties, eliminate liability, and provide for indemnification is addressed somewhat differently in the statutes governing the various forms of business entities.
Fiduciary Duties, Exculpation, and Indemnification in Texas Business Organizations
Restricting/Eliminating Fiduciary Duties in Texas and Delaware
Restricting/Eliminating Fiduciary Duties in Texas and Delaware
Overview of Fiduciary Duties, Exculpation, and Indemnification in Texas Business Organizations
Statutory developments beginning in the 1990s have impacted the analysis of fiduciary duties in the business organizations context. The duties of general partners are now defined by statutory provisions that delineate the duties without referring to them as “fiduciary” duties and specifically provide that partners shall not be held to the standard of a trustee. Whether limited partners in a limited partnership have fiduciary duties is not wellsettled, but the Business Organizations Code (BOC) clarifies that a limited partner does not owe the duties of a general partner solely by reason of being a limited partner. While the fiduciary duties of directors are still principally defined by common law, various provisions of the corporate statutes are relevant to the application of fiduciary-duty concepts in the corporate context. Because limited liability companies (LLCs) are a relatively recent phenomenon and the Texas LLC statutes do not specify duties of managers and members, there is some uncertainty with regard to the duties in this area, but the LLC statutes allude to or imply the existence of duties, and managers in a manager-managed LLC and members in a member-managed LLC should expect to be held to fiduciary duties similar to the duties of corporate directors or general partners. In each type of entity, the governing documents may vary (at least to some extent) the duties and liabilities of managerial or governing persons. The power to define duties, eliminate liability, and provide for indemnification is addressed somewhat differently in the statutes governing the various forms of business entities.
Fiduciary Duties for Employees in TX - A Moving Concept
Overview of Fiduciary Duties, Exculpation, and Indemnification in Texas Business Organizations
Statutory developments beginning in the 1990s have impacted the analysis of fiduciary duties in the business organizations context. The duties of general partners are now defined by statutory provisions that delineate the duties without referring to them as “fiduciary” duties and specifically provide that partners shall not be held to the standard of a trustee. Whether limited partners in a limited partnership have fiduciary duties is not wellsettled, but the Business Organizations Code (BOC) clarifies that a limited partner does not owe the duties of a general partner solely by reason of being a limited partner. While the fiduciary duties of directors are still principally defined by common law, various provisions of the corporate statutes are relevant to the application of fiduciary duty concepts in the corporate context. Because limited liability companies (LLCs) are a relatively recent phenomenon and the Texas LLC statutes do not specify duties of managers and members, there is some uncertainty with regard to the duties in this area, but the LLC statutes allude to or imply the existence of duties, and managers in a manager-managed LLC and members in a member-managed LLC should expect to be held to fiduciary duties similar to the duties of corporate directors or general partners. In each type of entity, the governing documents may vary (at least to some extent) the duties and liabilities of managerial or governing persons. The power to define duties, eliminate liability, and provide for indemnification is addressed somewhat differently in the statutes governing the various forms of business entities.
Fiduciary Duties in Alternate Entities
Overview of Traditional Fiduciary Duties and Alternate Entities Relevant Delaware Statutes Governing Alternate Entities Relevant Texas Statutes Governing Alternate Entities Standard Contractual Provisions in Alternate Entity Agreements Delaware Supreme Court Cases
Fiduciary Duties of Partners, Members & Managers
The sum and substance of the fiduciary duty is the duty to place the interests of one or more other parties before his or her own. This is the highest duty imposed in law, and it logically applies to limited categories of relationships. Where a fiduciary duty exists, the compliance burden is very high. Parties in litigation often dispute the existence of the relationship as well as its substance. Increasingly, parties seek to limit the scope of fiduciary duties by contract before litigation arises. This article will address these efforts as well as the scope of the fiduciary duty in partnerships, limited partnerships and limited liability companies. Finally, the article will address causes of action related to fiduciary duty issues in smaller companies, specifically, aiding and abetting a breach of fiduciary duty and shareholder oppression.
Director and Officer and Controlling Shareholder Duties and Liabilities Under Texas Law - Fiduciary Duties and Shareholder Oppression
Fiduciary Duties, Exculpation, and Indemnification in Texas Business Organizations
Statutory developments beginning in the 1990's have impacted the analysis of fiduciary duties in the business organizations context. The duties of general partners are now defined by statutory provisions that delineate the duties without referring to them as “fiduciary” duties and specifically provide that partners shall not be held to the standard of a trustee. Whether limited partners in a limited partnership have fiduciary duties is not wellsettled, but the new Business Organizations Code (“BOC”) clarifies that a limited partner does not owe the duties of a general partner solely by reason of being a limited partner. While the fiduciary duties of directors are still principally defined by common law, various provisions of the corporate statutes are relevant to the application of fiduciary duty concepts in the corporate context. Because limited liability companies (LLCs) are a relatively recent phenomenon and the Texas LLC statutes do not specify duties of managers and members, there is some uncertainty with regard to the duties in this area, but the LLC statutes allude to or imply the existence of duties, and managers in a manager-managed LLC and members in a member-managed LLC should expect to be held to fiduciary duties similar to the duties of corporate directors or general partners. In each type of entity, the governing documents may vary (at least to some extent) the duties and liabilities of managerial or governing persons. The power to define duties, eliminate liability, and provide for indemnification is addressed somewhat differently in the statutes governing the various forms of business entities.
Fiduciary Duties of Governing Persons in Texas Business Entities
This set of slides describes the relationship and duties of the Board of Directors to corporation and how that affects corporate governance.
How Recent Fiduciary Duty Cases Affect Advice to Directors and Officers of Delaware and Texas Corporations
Delaware Supreme Court Holds Directors’ Fiduciary Duties Require Monitoring Mission Critical Risks
A recent Delaware Supreme Court opinion provides guidance to directors for overseeing enterprise risk and discusses potential claims for breach of fiduciary duty when this oversight is insufficient.
Summer, 2014
Includes articles entitled: "Texas Supreme Court’s Recent Shareholder Oppression Opinions Reaffirm Primacy Of Common Law Fiduciary Duties" by Byron Egan and Michael L. Laussade; "Texas Pattern Jury Charge on Trade Secret Misappropriation Near Completion" by Joe Cleveland; and "CFPB Targets Law Firm with First Civil Enforcement Action" by Justin M. Long and John Podvin.
Summer, 2014
Includes articles entitled: "Texas Supreme Court’s Recent Shareholder Oppression Opinions Reaffirm Primacy Of Common Law Fiduciary Duties" by Byron Egan and Michael L. Laussade; "Texas Pattern Jury Charge on Trade Secret Misappropriation Near Completion" by Joe Cleveland; and "CFPB Targets Law Firm with First Civil Enforcement Action" by Justin M. Long and John Podvin.