What is the business judgment rule and how can this concept

What is the business judgment rule and how can this concept be used to protect against personal liability?

What is \"piercing the corporate veil\" and how can this be used to bring about the personal libilty of a officer or director of a corporation?

Solution

business judgement rule is introduced with a motive of save and protect the top level people in an organisation when their decisions in a business leads to negitive impact on the society or in the market. here the top level people includes CEOs, Directors, Managing Directors and so on. usually the Board will take decisions for the well being of business and in the process they wont look for self benefits. sometimes these decisinos will give negitive outputs and these people will face legal querries. at these conditions this business judgement rule will help them to protect them.

when some business desicions turns into negitives and created some problems in the customer community and harmful to the society, then the courts will consider the higher authority of the company is personally liable to the incident. this is called as the higher people are personally liable to the corporate actions, particularly they given negitive results to the society or any of the stakeholder suffers.

to protect from this concept, the safety strategy is business judgement rule, which can facilitate the higher authorites to protect from legal litigations and problems.