Wednesday, December 16, 2020
Although fiduciary duties typically protect minority shareholders, under Illinois law, shareholders of close corporations and regular corporations that look like close corporations may owe fiduciary duties to other shareholders and to their corporations.
Minority shareholders should consider taking steps to eliminate any fiduciary duties that they might owe.
When acquiring shares in a corporation, minority shareholders often evaluate the profitability of the corporation, the value of their shares, and what protections are in place to shield them from wrongdoing at the hands of the controlling shareholders. Most minority shareholders likely believe that they do not owe any obligations to their fellow shareholders or to the corporation. But under Illinois law, minority shareholders of certain types of corporations may actually owe fiduciary duties even if they are not directors or officers of those corporations.