What is required to become an officer under KY law?
Written by Kristi Street
There are few requirements to become an officer under KY law. According to statute, “A corporation shall have the officers described in its bylaws or appointed by the board of directors in accordance with the bylaws.” Ky. Rev. Stat. Ann. § 271B.8-400(1) (West). Furthermore, that statute states: “Every officer of a corporation, by acceptance of election or appointment as an officer, including by service, shall be deemed to have consented to the jurisdiction of the courts of the Commonwealth of Kentucky for any action by, in the name of, or on behalf of the corporation.” Ky. Rev. Stat. Ann. § 271B.8-400(5) (West). Therefore, in order to be considered an officer, one must either be described as an officer in the corporation’s bylaws, be appointed by the board of directors, accept election or appointment as an officer, or perform the services of an officer.
The duties of a corporate officer are described in the subsequent statute: “Each officer shall have the authority and shall perform the duties set forth in the bylaws or, to the extent consistent with the bylaws, the duties prescribed by the board of directors or by direction of an officer authorized by the board of directors to prescribe the duties of other officers.” Ky. Rev. Stat. Ann. § 271B.8-410 (West). In short, in order to perform the services of an officer, one must perform duties set forth by the bylaws, the board of directors, or an authorized officer.
Under the statute on the standards of conduct for officers, an officer’s duties are further described. It states:
(1) An officer with discretionary authority shall discharge his duties under that authority:
(a) In good faith;
(b) On an informed basis; and
(c) In a manner he honestly believes to be in the best interests of the corporation.
(2) An officer shall be considered to discharge his duties on an informed basis if he makes, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, inquiry into the business and affairs of the corporation, or into a particular action to be taken or decision to be made.
Ky. Rev. Stat. Ann. § 271B.8-420 (West). If one makes inquiry into the business and affairs of the corporation, or into a particular action to be taken or decision to be made, one may be said to have performed the duties of an officer on an informed basis.
In summary, in order to be counted as a corporation’s officer, one must be described in the bylaws, be appointed by the board of directors, and either accept that appointment officially or perform the services of an officer. These services are described in the bylaws or by the board of directors or an authorized officer. These duties may include inquiring into the business and affairs of the corporation, or looking into a particular action to be taken or decision to be made.