Can My Husband Close Bank Accounts and Change the Board of Directors?
Full Question:
Answer:
The answer will depend on all the circumstances involved, such as whose name the bank accounts were in, the bank’s policies, and the bylaws of the corporation. If they were corporate accounts, even if he had authority as a corporate officer to withdraw funds or close the account, it must not be done for personal gain to the detriment of the corporation, or a breach of fiduciary duty may be found.
The elements of a cause of action for breach of fiduciary duty are:
(1) Plaintiff and Defendant share a relationship whereby:
(a) Plaintiff reposes trust and confidence in Defendant, and
(b) Defendant undertakes such trust and assumes a duty to advise, counsel and/or
protect Plaintiff;
(2) Defendant breaches its duties to Plaintiff; and
(3) Plaintiff suffers damages.
The elements of a claim for breach of fiduciary duty are not fixed as the claim may arise from virtually any case where one party accepts the trust and assumes the duty to protect a weaker party.
Affirmative defenses to a claim for breach of fiduciary duty can include, but are not limited to:
(1) The passing of the statute of limitations for filing the claim.
(2) Lack of fiduciary relationship (for example, when the parties did not enter a fiduciary relationship, but rather conducted business in an arm’s length transaction there is no duty to protect the other party or disclose facts which the other party could have discovered by its own diligence.)
(3) Lack of standing
(4) Approval (for example, if the alleged actions followed full disclosure to and the consent of the Plaintiff)
(5) Business judgment rule (ex. that the corporate fiduciary's actions were motivated by a bona fide interest in the well being of the corporation where shareholders are the ones owed the fiduciary duty)
If the accounts were jointly owned personal accounts, in the case of spouses owning a joint bank account, without consent, one spouse cannot remove the other's name from the account. However one spouse can close the account and then open a new account with the money. This can work both ways, so the other spouse has equal opportunity to close the account and get the money. On a joint account either person can go in and close the account out. Then take the money and open a new account. Most of the time it depends on who makes it to the bank first to close out the account.
The removal or firing of board members will be governed by the articles of incorporation and its bylaws. For example, the bylaws may specify a procedure which requires either a majority vote of the Board members themselves or a certain percentage vote of the eligible voting members. In order to remove a corporate director and appoint another, the bylaws and articles will specify the requirements for notice, meeting, and voting procedures. Please read the terms of the corporate articles and bylaws to determine applicable requirements regarding removal a and appointment of directors. We suggest you consult a local attorney who can review all the facts and documents involved.
