Legal Question in Business Law in Michigan
Liabilities of ''Officer of the Company''
An overseas company wants to set up US operations in Michigan. I have accepted an offer of General Manager for this purpose. They have submitted paperwork for a tax-payer id to have the company incorporated in the state of MI. It turns out that
only an officer of the company with a social security number can do so. They are now suggesting that I be made an officer of the company to get the incorporation completed as soon as possible.
This is definitely an area of ignorance for me - are there any liabilities or legal responsibilities that I may be directly/indirectly accountable for by being named an ''officer of the company''? It is a fully private company, single owner, 100% internally funded and no shareholders.
I would appreciate any advice and recommendations on how to proceed,
Best regards
2 Answers from Attorneys
Re: Liabilities of ''Officer of the Company''
First, this is a very common practice (especially with Japanese companies), but you should still make sure to protect yourself. You need a written agreement with the foreign company which limits your role as an incorporator, and ensures that the company is responsible for all actions you take on their behalf. In general, just make sure that your attorney has had a chance to review the work you're being asked to do which is of a semi-legal nature.
Re: Liabilities of ''Officer of the Company''
Officer liability in Michigan is rare. Generally as an officer, you have two duties. First, a Duty of Care, which means you have a duty to act as a reasonable officer would act. Second, you have a Duty of Loyalty, to not do any self-dealing. You can't favor yourself over the corporation.
There are a few instances when an officer could be liable for an act by the company. Again it is rare. Please feel free to contact me at 248-263-3514, should you wish to follow up. Erik Stamell
Related Questions & Answers
-
African American owners of a million dollar home expected to move in 3 months sh In... Asked 1/04/01, 11:55 am in United States Michigan Business Law
-
Excessive Bottle Bill My fathers business recently recieved a letter from the... Asked 12/28/00, 4:29 pm in United States Michigan Business Law
-
Lack of performance and misrepresentation-Real Estate Can we recoup due to lack of... Asked 12/14/00, 5:50 pm in United States Michigan Business Law
-
Duplicating a business plan I am a business owner, and I was going to lease some... Asked 12/12/00, 12:46 pm in United States Michigan Business Law
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
