Can a person be the licence holder, a stock holder and RME for one company and also be a stockholder and manager/employee of a competing company?
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Can a person be the licence holder, a stock holder and RME for one company and also be a stockholder and manager/employee of a competing company?
Asked on May 15, 2013 under Business Law, Hawaii
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
Yes, a person can do this, subject to three caveats:
1) If the operating agreement(s) or other contracts of or with either company forbids this, he could not do it;
2) If he is not the sole stockholder, but is a controlling person of one or more companies, it is possible that if his actions on behalf of another company damage the company of which he is a controlling person, that he will be deemed to have violated his fidicuciary duty to his fellow stockholders;
3) It is a possible that a specific industry/licensing regime may forbid this; it is important to check industry- or profession-specific rules.
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