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What are Fiduciary Duties?
A fiduciary duty is a legally defined obligation to act in the best interests of another party. In a corporate law context, the officers and directors of a corporation generally have two distinct fiduciary duties owed to the corporation and its shareholders.
1. Duty of Care – the officers and directors of a corporation must in good faith act the same as a reasonably prudent individual would in the same circumstance.
2. Duty of Loyalty – the officers and directors of a corporation must act in a manner that the officer or director believes in good faith to be in the best interests of the corporation and its shareholders.
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