What my legal obligations are as an officer of a company?
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What my legal obligations are as an officer of a company?
In addition, what is my legal exposure should any type of legal action be taken against the company? I have been asked to become an officer in a small company. This is a family owned and operated company. I am not related in any way.
Asked on April 28, 2011 under Business Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
There is no simple or easy answer, it an officer's potential exposure or liability depends on your exact position and on what kind of potential liablity you are talking about. There are certain wage and hour violations (not paying workers the correct amount) for which they managers or supervisors can be held liable. If you are in a financial position (CFO, controller, etc.), then you could have liability related to certain tax payments or (if the company ever goes public in any fashion) to securities disclosure. For a quick rule of thumb--officers are not generally liable for contracts or torts (unless they personally committed the tort, or guaranteed the contract), but could face tax, securitiers law, and wage-related liability...and generally, the higher level the position, the greater the potential exposure.
Once you know your exact responsibilities, you can look into/inquire about those specific matters.
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