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A corporation is a separate legal entity, with
its own identity. Once funds are deposited into a corporate account,
those funds become the property of the corporation. Decisions with
regard to a corporation’s property are made by the shareholders and
carried out by the board of directors and officers of the
corporation. Florida law requires that a corporation has a board of
directors and that the board exercise all corporate powers. Any
action of the board must be approved in a meeting and if no such
meeting occurs, then by written unanimous consent of the board of
directors. The board of directors has the authority to execute
bylaws, which detail the methods through which these decisions and
activities occur.
The directors of a corporation are fiduciaries who are entrusted
with the activities of the corporation and are held to a high
standard of conduct. Under Florida corporate law, a director must
perform his or her corporate duties: (1) in good faith; (2) with
such care as an ordinary prudent person in a like position would
exercise under similar circumstances; and (3) in a manner the
director reasonably believes to be in the best interests of the
corporation. Courts have noted that Florida law has long recognized
that corporate officers and directors owe duties of loyalty and a
duty of care to the corporation. A director’s fiduciary duties are
extended to the creditors of a corporation when the corporation
becomes insolvent or is in the vicinity of insolvency.
Fraudulent transfers in Florida are governed by statute:
A transfer made by a debtor is fraudulent as to
a creditor whose claim arose before the transfer was made if the
transfer was made to an insider for an antecedent debt, the debtor
was insolvent at the time, and the insider had reasonable cause to
believe that the debtor was insolvent.
Generally speaking, if there is not enough
corporate funds to pay all creditors, an “insider” of the
corporation cannot get paid before outside creditors.
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