Practice question
What does the business judgment rule generally protect against in the case of lawful corporate policy decisions honestly made within the board's authority?
- All inquiry into fraud.
- Every statutory obligation.
- Judicial substitution of a different business preference merely because a court thinks it wiser.
- Any shareholder inspection right.
- Every contractual duty owed to third parties.
Legal references
- Montelibano v. Bacolod-Murcia Milling Co., G.R. No. L-15092, 18 May 1962, https://www.lawphil.net/judjuris/juri1962/may1962/gr_l-15092_1962.html
- Teng v. Teng, G.R. No. 277015, 17 February 2025, main decision, https://lawphil.net/judjuris/juri2025/feb2025/gr_277015_2025.html
- Revised Corporation Code, RA 11232, sections 22, 30 and 39, https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/2/86463
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