Florida Statutes 607.0831 – Liability of directors
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(1) A director is not personally liable for monetary damages to the corporation or any other person for any statement, vote, decision to take or not to take action, or any failure to take any action, as a director, unless:
(a) The director breached or failed to perform his or her duties as a director; and
Terms Used In Florida Statutes 607.0831
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Interest: means :(a) A share in a corporation for profit;(b) A membership in a nonprofit corporation;(c) A partnership interest in a general partnership, including a limited liability partnership;(d) A partnership interest in a limited partnership, including a limited liability limited partnership;(e) A membership interest in a limited liability company;(f) A share or beneficial interest in a real estate investment trust;(g) A member's interest in a limited cooperative association;(h) A beneficial interest in a statutory trust, business trust, or common law business trust; or(i) A governance interest or distributional interest in another entity. See Florida Statutes 607.01401
- Merger: means a transaction pursuant to…. See Florida Statutes 607.01401
- Person: includes an individual and an entity. See Florida Statutes 607.01401
- Proceeding: includes a civil suit, a criminal action, an administrative action, and an investigatory action. See Florida Statutes 607.01401
- Shareholder: means a record shareholder. See Florida Statutes 607.01401
- Shares: means the units into which the proprietary interests in a corporation are divided. See Florida Statutes 607.01401
(b) The director’s breach of, or failure to perform, those duties constitutes any of the following:1. A violation of the criminal law, unless the director had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful. A judgment or other final adjudication against a director in any criminal proceeding for a violation of the criminal law estops that director from contesting the fact that his or her breach, or failure to perform, constitutes a violation of the criminal law; but does not estop the director from establishing that he or she had reasonable cause to believe that his or her conduct was lawful or had no reasonable cause to believe that his or her conduct was unlawful;2. A circumstance under which the transaction at issue is one from which the director derived an improper personal benefit, either directly or indirectly;3. A circumstance under which the liability provisions of s. 607.0834 are applicable;4. In a proceeding by or in the right of the corporation to procure a judgment in its favor or by or in the right of a shareholder, conscious disregard for the best interest of the corporation, or willful or intentional misconduct; or5. In a proceeding by or in the right of someone other than the corporation or a shareholder, recklessness or an act or omission which was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property.
(2) For the purposes of this section, the term “recklessness” means the action, or omission to act, in conscious disregard of a risk:
(a) Known, or so obvious that it should have been known, to the director; and
(b) Known to the director, or so obvious that it should have been known, to be so great as to make it highly probable that harm would follow from such action or omission.
(3) A director is deemed not to have derived an improper personal benefit from any transaction if the transaction and the nature of any personal benefit derived by the director are not prohibited by state or federal law or regulation and, without further limitation:
(a) In an action other than a derivative suit regarding a decision by the director to approve, reject, or otherwise affect the outcome of an offer to purchase the shares of, or to effect a merger of, the corporation, the transaction and the nature of any personal benefits derived by a director are disclosed or known to all directors voting on the matter, and the transaction was authorized, approved, or ratified by at least two directors who comprise a majority of the disinterested directors (whether or not such disinterested directors constitute a quorum); or
(b) The transaction is fair to the corporation at the time it is authorized, approved, or ratified as determined in accordance with s. 607.0832.
(4) The circumstances set forth in subsection (3) are not exclusive and do not preclude the existence of other circumstances under which a director will be deemed not to have derived an improper benefit.