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Personal Liability for Corporate Officers and Directors

One of the traditional benefits of a corporation is that it generally shields its shareholders, directors and officers from the liabilities of the corporation. Indeed, merely holding a corporate officer in Missouri does not subject one to personal liability for the misdeeds of the corporation. Grothe v. Helterbrand, 946 S.W.2d 301, 304 (Mo. Ct. App. 1997). As always, though, there are exceptions in the law. 

A corporate officer may be held liable if it is shown that he or she had actual or constructive knowledge of the actionable wrong and participated therein. Estate of Overbey v. Chad Franklin Nat’l Auto Sales North, LLC, 361 S.W.3d 364, 371 (Mo. 2012). An example of when this may occur is when an officer’s conduct is fraudulent. Another example specific to Missouri is when a corporate officer violates the Missouri Merchandising Practices Act by participating in “deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce.” Section 407.020, RSMo.

Contact with questions relative to corporations, business disputes and corporate and business liability.