Under the duty of loyalty, managers may not enter into an agreement on behalf of their corporation

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Under the duty of loyalty, managers may not enter into an agreement on behalf of their corporation that benefits them personally, unless the board of directors or the shareholders have first approved it. If the manager does not seek the necessary approval, the business judgment rule no longer applies, and the manager will be liable unless the transaction was entirely fair to the corporation.

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Legal Environment

ISBN: 9780324537116

3rd Edition

Authors: Jeffrey F Beatty, Susan S Samuelson

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