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This entry was published on 2019-11-15
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SECTION 716
Loans to directors, officers and key persons
Not-for-Profit Corporation (NPC) CHAPTER 35, ARTICLE 7
§ 716. Loans to directors, officers and key persons.

No loans, other than through the purchase of bonds, debentures, or
similar obligations of the type customarily sold in public offerings, or
through ordinary deposit of funds in a bank, shall be made by a
corporation to its directors, officers or key persons, or to any other
corporation, firm, association or other entity in which one or more of
its directors, officers or key persons are directors, officers or key
persons or hold a substantial financial interest, except a loan by one
charitable corporation to another charitable corporation. A loan made in
violation of this section shall be a violation of the duty to the
corporation of the directors or officers authorizing it or participating
in it, but the obligation of the borrower with respect to the loan shall
not be affected thereby.