§ 23-1-35-3 — Loan or guarantee to director

Indiana § 23-1-35-3

• Jurisdiction: Indiana
• Title 23: BUSINESS AND OTHER ASSOCIATIONS
• Art. 1: INDIANA BUSINESS CORPORATION LAW
• Ch. 35: Standards of Conduct for Directors

Text

(a) Except as provided by subsection (c), 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 a majority of
the votes represented by the outstanding voting shares of all
classes, voting as a single voting group, except the votes of shares
owned by or voted under the control of the benefited director; or
(2) the corporation's board of directors 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.
(c) This section does not apply to loans and guarantees authorized
by statute regulating any special class of corporations.

Legislative History

As added by P.L.149-1986, SEC.19.