Question

what does the business judgment rule mean? only a judge can rule when a corporation is sued, not a jury. managers of a corporation cannot be sued for losing money as long as their decisions were made in good faith. investors are expected to exercise good judgment when making business decisions. organizations are treated as individuals.

Answer 1

The business judgment rule protects managers of a corporation from being sued for losing money as long as their decisions were made in good faith. It allows managers to exercise their judgment in making business decisions without fear of personal liability, as long as they act in the best interest of the corporation.

Step-by-step explanation:

The business judgment rule is a legal principle that protects managers of a corporation from being sued for losing money as long as their decisions were made in good faith. It allows managers to exercise their judgment in making business decisions without fear of personal liability, as long as they act in the best interest of the corporation. The rule recognizes that managers often have more knowledge and expertise in running the business and should be given the freedom to make decisions without the threat of legal action.

Under the business judgment rule, managers are expected to act with due care, loyalty, and good faith. They should make informed decisions, consider the interests of shareholders, and avoid conflicts of interest. This rule promotes risk-taking and innovation in the business world by protecting managers from lawsuits if they make reasonable decisions that turn out to be unsuccessful.