Legislation

Search OpenLegislation Statutes
This entry was published on 2014-09-22
The selection dates indicate all change milestones for the entire volume, not just the location being viewed. Specifying a milestone date will retrieve the most recent version of the location before that date.
SECTION 714
Loans to directors
Business Corporation (BSC) CHAPTER 4, ARTICLE 7
§ 714. Loans to directors.

(a) A corporation may not lend money to or guarantee the obligation of
a director of the corporation unless:

(1) the particular loan or guarantee is approved by the shareholders,
with the holders of a majority of the votes of the shares entitled to
vote thereon constituting a quorum, but shares held of record or
beneficially by directors who are benefitted by such loan or guarantee
shall not be entitled to vote or to be included in the determination of
a quorum; or

(2) with respect to any corporation in existence on the effective date
of this subparagraph (2) the certificate of incorporation of which
expressly provides such and with respect to any corporation incorporated
after the effective date of this subparagraph (2), the board determines
that the loan or guarantee benefits the corporation and either approves
the specific loan or guarantee or a general plan authorizing loans and
guarantees.

(b) The fact that a loan or guarantee is made in violation of this
section does not affect the borrower's liability on the loan.