Building a business from the ground up can be a labor of love for a Chicago resident. Though they may take on many of the initial duties of running their entity on their own, over time an individual may associate with others to grow their business and support its success. As individuals become associated with a corporate entity, they may become fiduciaries with regard to their responsibilities.
A person with a fiduciary relationship to a business is a person who has been entrusted with confidence by the business. A fiduciary must be aware that they have been given powers or responsibilities; an example of a fiduciary within a business structure may be a member of the entity’s board of directors. Individuals who have been given the authority to act on behalf of the business and to do so in a responsible manner may be fiduciaries.
When individuals with fiduciary relationships act responsibly and with the interests of their businesses in mind, they may be fulfilling their duties. However, when fiduciaries shirk their duties, make self-motivated decisions or otherwise engage in fraud or deceitful practices, they may violate the trust that has been put into them by virtue of their relationship to the entity.
When a fiduciary duty is breached, a company may have different remedies to pursue. Actual financial damages may be sought to bring a business back to where it was before the fiduciary’s breach. Punitive or punishment damages may also be available. As with other forms of business litigation, how a lawsuit based on the breach of a fiduciary will resolve will depend on the facts and circumstances of the particular case.