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Fiduciary duties in business and commercial law A presumption exists in business and commercial law. Called the “Business Judgment Rule,” directors are presumed to be informed and act in good faith when making decisions affecting the company. A court will assume this presumption unless it is proved that fiduciary duties have been violated. Fiduciary duties consist of a duty of loyalty and a duty of care. Directs, officers, and shareholders are required to follow these duties. The duty of loyalty requires a director to not self-deal or take a position that creates a conflict of interest with the corporation; she must always act in good faith. The duty of care requires a director to have informed oversight of corporate operations and obtain adequate information before making corporate decisions. Shareholders also have a fiduciary duty to deal fairly and not exploit minority shareholders. Violation of fiduciary duties by directors, officers, or shareholders can be found to be a breach of contract and legal action can be taken. Governing law of business and commercial entities The law that governs a business or commercial entity varies depending on the type of entity. The Uniform Partnership Act and Revised Uniform Partnership Act guide both general and limited liability partnerships while the Uniform Limited Liability Company Act governs Limited Liability Companies. If a company has gone public and sells stock, then it is subject to the regulations of the Security Exchange Commission . A public company must comply with the Securities Act of 1933 as well as the Sarbanes Oxley Act of 2002. The Sarbanes Oxley Act requires attorneys to report evidence of a material violation of securities law or breach of fiduciary duty to the company's CFO or even board of directors; it also permits the attorney, in certain circumstances, to disclose confidential information to the SEC without the consent of the client-company. The Uniform Commercial Code must be followed in all businesses involving the sale of goods. Furthermore, most businesses or commercial entities have internal controls such as articles of incorporation, bylaws, and organizational meetings. By Delinda Tamagni