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.

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