Officers and directors are the decision makers of the corporations they work for. In general, the decisions they make do not render them liable to civil lawsuits or personal liability. This is the business judgment rule. It says that officers and directors may not be held personally liable for negligent or careless business decisions. However, some decisions and actions may subject them to personal liability in commercial litigation.
Officers and directors of corporations may be held liable for decisions that:
- Act in their own interest as opposed to the interest of the corporation
- Cause financial loss to the corporation
- Commit a crime or wrongful act
In general, poor business decisions do not provide grounds for liability, unless those decisions violate a duty that the officer or director owes to the corporation. Common litigation issues that arise concerning officer and director liability include accusations of fraud, concerns about wrongful termination, intellectual property disputes, business transaction disputes, and breaches of fiduciary duties. Thus, when officers and directors fail to perform their duties and make decisions that violate state and federal laws, benefit their own agendas, or harm the corporation, they may be held liable in commercial litigation.
Who May Be Held Personally Liable Under Georgia Tax Law?
In the Georgia Tax Code, section 48-2-52, a variety of people may be held personally liable for decisions involving taxes. These include officers, directors, employees, members, partners, or managers who have supervision of collections obtained from purchasers. In general, people who have control of collecting sales taxes, or those who have the power to withhold taxes from employees, may be held personally liable for unlawful actions.
These officers, directors, and other members may be found personally liable if they willfully:
- Fail to remit the amount of collected taxes to the Department of Revenue
- Do not collect necessary taxes
- Try to defeat or evade any obligation under the Georgia sales tax code
In order to be found liable, it must be proven that the officers acted willfully and intentionally. Mere negligence or carelessness does not warrant personal liability. However, certain actions and decisions can make an officer or director liable to repay the amount of taxes that are evaded or uncollected. Thus, it is important to pay close attention to Georgia’s business tax codes and other laws, and to make decisions that are lawful and beneficial to the company’s interests.
Why Is It Important to Seek Legal Assistance?
Commercial litigation is often contentious and complicated. That is why it is important to seek representation from a knowledgeable and efficient attorney. When partners, members, shareholders, or other persons involved in a corporation file a complaint against an officer or director, a thorough investigation of the accusation is essential. If the officers or directors acted with disloyalty for selfish gain, or willfully made unlawful decisions, they may be held personally liable and will be subject to civil and criminal penalties in commercial litigation.
Passionate Representation for Commercial Litigation Issues
At our firm, we provide legal services to individuals and corporations in commercial litigation. Whether you are an officer or director at a corporation accused of making unlawful decisions, or you are pursuing a complaint against an officer or director at your corporation, our Marietta commercial litigation attorneys can guide you through the process. We can gather evidence, talk to witnesses, and use effective legal strategies to help you seek a favorable solution. Whatever your situation, our firm can help you make informed decisions regarding your case and answer your questions every step of the way.
Contact us today for a free consultation.