What are the duties of the Directors of a Closely Held Corporation?
Directors of a Massachusetts corporation, including small closely held companies, stand in a fiduciary relationship to the company. As fiduciaries, their primary duty is to the Corporation and their personal interest are subordinate to that duty. Directors’ basic duties comprise both the duty of care and the duty of loyalty. Dealings between a corporation and its directors are held to the standard of good faith and inherent fairness. Massachusetts courts will examine carefully self-dealing where the directors’ self-interest and duty of loyalty to the Corporation may be in conflict.
