The requirement that a person act solely in another person or entity’s best interest is known as a fiduciary duty. Fiduciary duties arise in a number of contexts, such as trustee-beneficiary, guardian-ward, partnerships, attorney-client and employee-employer relationships. Perhaps the most common and well-known fiduciary relationship is that between corporate directors and corporations. Directors have a fiduciary responsibility to act in the best interest of the corporation. This duty can be breached by mismanagement of the company, self-dealing or taking corporate opportunities for oneself. In Virginia, managers of a limited liability company (LLC) do not owe each other a fiduciary duty unless the operating agreement states otherwise. If you are a manager or member of an LLC, it’s important to establish the responsibilities and duties between members through the use of an effective operating agreement.
If you need legal assistance for your business, contact a Virginia business lawyer today at 703-280-0037.