{"id":2836,"date":"2017-05-22T15:28:57","date_gmt":"2017-05-22T19:28:57","guid":{"rendered":"https:\/\/www.lindabury.com\/firm\/?p=2836"},"modified":"2019-12-23T18:25:08","modified_gmt":"2019-12-23T23:25:08","slug":"fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims","status":"publish","type":"post","link":"https:\/\/www.lindabury.com\/firm\/insights\/fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims.html","title":{"rendered":"Fiduciary Duties Owed by Business Owners to Their Company: A Primer on Common Causes of Shareholder Oppression Claims"},"content":{"rendered":"<p>Because of the fiduciary duties owed by business owners to each other, whether they are shareholders in a closely held corporation, members in a limited company, or partners in a general or limited partnership, a business owner generally is prohibited from competing with the company. This general prohibition can be modified by an agreement among the owners, but in the absence of such an agreement the prohibition stands.<\/p>\n<p>Failure to do so is referred to as the diversion of corporate opportunities. An owner of a closely held business has a duty to bring to the company any business opportunity that the company would normally expect to seek to pursue. The opportunity must be presented to the company and cannot be pursued individually unless the company decides not to pursue that opportunity.<\/p>\n<p>As with the prohibition on competition, the requirement to present all opportunities to the company can be altered by contract. Pursuant to N.J.S.A. 14A:3-1, a corporation can renounce its interest in, or expectancy of the opportunity to pursue, specific opportunities. One manner in which corporate opportunities can be relinquished is to insert the pertinent language in the Certificate of Incorporation. When starting a new business, if there is any thought that one or more owners might want the right to pursue competing opportunities, you want to include language in the Certificate of Incorporation, or a separate shareholder agreement, that specifies what competing businesses the shareholder may appropriate.<\/p>\n<div class=\"read_more_link\"><a href=\"https:\/\/www.lindabury.com\/firm\/insights\/fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims.html\"  title=\"Continue Reading Fiduciary Duties Owed by Business Owners to Their Company: A Primer on Common Causes of Shareholder Oppression Claims\" class=\"more-link\">Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Because of the fiduciary duties owed by business owners to each other, whether they are shareholders in a closely held corporation, members in a limited company, or partners in a general or limited partnership, a business owner generally is prohibited from competing with the company. This general prohibition can be modified by an agreement among [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[245,99,65,248],"tags":[],"coauthors":[173],"class_list":["post-2836","post","type-post","status-publish","format-standard","hentry","category-corporate-ma-insights","category-pierce","category-insights","category-litigation-insights"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Fiduciary Duties Owed by Business Owners to Their Company: A Primer on Common Causes of Shareholder Oppression Claims &#8212; May 22, 2017 &#8212; Lindabury, McCormick, Estabrook &amp; Cooper, P.C. Firm News &amp; Events<\/title>\n<meta name=\"description\" content=\"Because of the fiduciary duties owed by business owners to each other, whether they are shareholders in a closely held corporation, members in a limited\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.lindabury.com\/firm\/insights\/fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fiduciary Duties Owed by Business Owners to Their Company: A Primer on Common Causes of Shareholder Oppression Claims &#8212; May 22, 2017 &#8212; Lindabury, McCormick, Estabrook &amp; Cooper, P.C. Firm News &amp; Events\" \/>\n<meta property=\"og:description\" content=\"Because of the fiduciary duties owed by business owners to each other, whether they are shareholders in a closely held corporation, members in a limited\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.lindabury.com\/firm\/insights\/fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims.html\" \/>\n<meta property=\"og:site_name\" content=\"Lindabury, McCormick, Estabrook &amp; Cooper, P.C. Firm News &amp; Events\" \/>\n<meta property=\"article:published_time\" content=\"2017-05-22T19:28:57+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-12-23T23:25:08+00:00\" \/>\n<meta name=\"author\" content=\"David R. Pierce\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"David R. Pierce\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Fiduciary Duties Owed by Business Owners to Their Company: A Primer on Common Causes of Shareholder Oppression Claims &#8212; May 22, 2017 &#8212; Lindabury, McCormick, Estabrook &amp; Cooper, P.C. Firm News &amp; Events","description":"Because of the fiduciary duties owed by business owners to each other, whether they are shareholders in a closely held corporation, members in a limited","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.lindabury.com\/firm\/insights\/fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims.html","og_locale":"en_US","og_type":"article","og_title":"Fiduciary Duties Owed by Business Owners to Their Company: A Primer on Common Causes of Shareholder Oppression Claims &#8212; May 22, 2017 &#8212; Lindabury, McCormick, Estabrook &amp; Cooper, P.C. Firm News &amp; Events","og_description":"Because of the fiduciary duties owed by business owners to each other, whether they are shareholders in a closely held corporation, members in a limited","og_url":"https:\/\/www.lindabury.com\/firm\/insights\/fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims.html","og_site_name":"Lindabury, McCormick, Estabrook &amp; Cooper, P.C. Firm News &amp; Events","article_published_time":"2017-05-22T19:28:57+00:00","article_modified_time":"2019-12-23T23:25:08+00:00","author":"David R. Pierce","twitter_card":"summary_large_image","twitter_misc":{"Written by":"David R. Pierce","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.lindabury.com\/firm\/insights\/fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims.html#article","isPartOf":{"@id":"https:\/\/www.lindabury.com\/firm\/insights\/fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims.html"},"author":{"name":"Lindabury, McCormick, Estabrook &amp; Cooper, P.C.","@id":"https:\/\/www.lindabury.com\/firm\/#\/schema\/person\/429b3bd6b52a7aa6eb9a0709bbb4d06f"},"headline":"Fiduciary Duties Owed by Business Owners to Their Company: A Primer on Common Causes of Shareholder Oppression Claims","datePublished":"2017-05-22T19:28:57+00:00","dateModified":"2019-12-23T23:25:08+00:00","mainEntityOfPage":{"@id":"https:\/\/www.lindabury.com\/firm\/insights\/fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims.html"},"wordCount":704,"articleSection":["Corporate and M&amp;A","David R. Pierce","Insights","Litigation"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.lindabury.com\/firm\/insights\/fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims.html","url":"https:\/\/www.lindabury.com\/firm\/insights\/fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims.html","name":"Fiduciary Duties Owed by Business Owners to Their Company: A Primer on Common Causes of Shareholder Oppression Claims &#8212; May 22, 2017 &#8212; Lindabury, McCormick, Estabrook &amp; Cooper, P.C. Firm News &amp; Events","isPartOf":{"@id":"https:\/\/www.lindabury.com\/firm\/#website"},"datePublished":"2017-05-22T19:28:57+00:00","dateModified":"2019-12-23T23:25:08+00:00","author":{"@id":"https:\/\/www.lindabury.com\/firm\/#\/schema\/person\/429b3bd6b52a7aa6eb9a0709bbb4d06f"},"description":"Because of the fiduciary duties owed by business owners to each other, whether they are shareholders in a closely held corporation, members in a limited","breadcrumb":{"@id":"https:\/\/www.lindabury.com\/firm\/insights\/fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims.html#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.lindabury.com\/firm\/insights\/fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims.html"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.lindabury.com\/firm\/insights\/fiduciary-duties-owed-business-owners-company-primer-common-causes-shareholder-oppression-claims.html#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"\/"},{"@type":"ListItem","position":2,"name":"Insights","item":"https:\/\/www.lindabury.com\/firm\/insights"},{"@type":"ListItem","position":3,"name":"Fiduciary Duties Owed by Business Owners to Their Company: A Primer on Common Causes of Shareholder Oppression Claims"}]},{"@type":"WebSite","@id":"https:\/\/www.lindabury.com\/firm\/#website","url":"https:\/\/www.lindabury.com\/firm\/","name":"Lindabury, McCormick, Estabrook &amp; Cooper, P.C. Firm News &amp; Events","description":"Published by Lindabury, McCormick, Estabrook &amp; Cooper","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.lindabury.com\/firm\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.lindabury.com\/firm\/#\/schema\/person\/429b3bd6b52a7aa6eb9a0709bbb4d06f","name":"Lindabury, McCormick, Estabrook &amp; Cooper, P.C.","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/a19d0fac94b8d3d657028926f65c841917c5f8f0dd3f23ad394e83f16c690e09?s=96&d=mm&r=g3f2ca7450f0195db092bccff4fb8982e","url":"https:\/\/secure.gravatar.com\/avatar\/a19d0fac94b8d3d657028926f65c841917c5f8f0dd3f23ad394e83f16c690e09?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/a19d0fac94b8d3d657028926f65c841917c5f8f0dd3f23ad394e83f16c690e09?s=96&d=mm&r=g","caption":"Lindabury, McCormick, Estabrook &amp; Cooper, P.C."},"sameAs":["https:\/\/www.lindabury.com"]}]}},"yoast":{"focuskw":"","title":"","metadesc":"","linkdex":"","metakeywords":"","meta-robots-noindex":"","meta-robots-nofollow":"","meta-robots-adv":"","canonical":"","redirect":"","opengraph-title":"","opengraph-description":"","opengraph-image":"","twitter-title":"","twitter-description":"","twitter-image":""},"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.lindabury.com\/firm\/wp-json\/wp\/v2\/posts\/2836","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lindabury.com\/firm\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lindabury.com\/firm\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lindabury.com\/firm\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lindabury.com\/firm\/wp-json\/wp\/v2\/comments?post=2836"}],"version-history":[{"count":1,"href":"https:\/\/www.lindabury.com\/firm\/wp-json\/wp\/v2\/posts\/2836\/revisions"}],"predecessor-version":[{"id":2837,"href":"https:\/\/www.lindabury.com\/firm\/wp-json\/wp\/v2\/posts\/2836\/revisions\/2837"}],"wp:attachment":[{"href":"https:\/\/www.lindabury.com\/firm\/wp-json\/wp\/v2\/media?parent=2836"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lindabury.com\/firm\/wp-json\/wp\/v2\/categories?post=2836"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lindabury.com\/firm\/wp-json\/wp\/v2\/tags?post=2836"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.lindabury.com\/firm\/wp-json\/wp\/v2\/coauthors?post=2836"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}