The power to manage the corporation does not generally lie in the shareholders; rather, that power lies in the board of directors. Because they don't manage the corporation, shareholders generally have no fiduciary duties to the corporation or to their fellow shareholders.
Things change in close corporations, defined as a corporation with few shareholders and with a stock that is not publicly traded. In a close corporation, the board of directors can be eliminated so that the shareholders run the business.
For shareholders to eliminate the board of directors so that they can run the business in a close corporation, a shareholder management agreement is needed. These agreements are used in close corporations and allow shareholders to enter into agreements to dispense with the board of directors and vest management power in the shareholders. Without such agreements, shareholders have limited control (such as electing and removing directors, modifying bylaws, and approving fundamental changes).
Shareholder management agreements may be set up either in the articles of incorporation if approved by all shareholders or by a unanimous written shareholder agreement. Once an agreement is in place, managing shareholders will also be subject to liabilities that would normally only apply to directors.
For example, in many states, courts impose a fiduciary duty of loyalty and care on controlling shareholders in a close corporation. These duties are owed to other shareholders. In addition, controlling shareholders cannot use their power to benefit at the expense of minority shareholders. A common duty is often imposed as well on controlling shareholders to disclose material information to minority shareholders.
With liability sometimes come consequences. Minority shareholders can then sue controlling shareholders if there's a breach of these traditional fiduciary duties.
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