Business Judgment Rule

The business judgment rule protects a director(s) from personal liability if he or she has performed diligently and carefully in legitimate furtherance of corporate objectives and purposes and has not acted fraudulently, illegally, or otherwise in bad faith. The business judgment rule may be codified, but it is largely a matter of judicial interpretation and application. The business judgment rule is frequently invoked in shareholder damage suits against a director or board of directors. Courts generally acknowledge that the business judgment rule either does or may apply to corporate officers.

Securities Trading Halts, Delays, and Suspensions

The Securities and Exchange Commission may suspend trading in a security for up to ten days. Securities exchanges such as the New York and American Stock Exchanges and Nasdaq may delay trading in a security at the beginning of a trading day or halt trading in a security during the trading day.

Interval Investment Funds

Interval funds are a type of closed-end fund that offers to buy shares in the fund back from investors at stated intervals and in stated amounts. However, shareholders are not obligated to sell their shares back to the fund.

General Partnership Basics

Partnerships are a traditional form for doing business. General partnerships are made up of two or more persons or entities, each of which takes part in and is responsible for the management of the partnership. Other partnerships and companies may be partners in a general partnership.

Blue Sky or State Securities Laws

Regulation of the securities industry by the Securities and Exchange Commission and by self-regulatory organizations such as the national stock exchanges is well known. However, in addition to such regulation, each state provides its own securities laws and rules that sellers of securities in the states must follow.