§ 714 — Loans to directors

§ 714. Loans to directors.\n (a) A corporation may not lend money to or guarantee the obligation of\na director of the corporation unless:\n (1) the particular loan or guarantee is approved by the shareholders,\nwith the holders of a majority of the votes of the shares entitled to\nvote thereon constituting a quorum, but shares held of record or\nbeneficially by directors who are benefitted by such loan or guarantee\nshall not be entitled to vote or to be included in the determination of\na quorum; or\n (2) with respect to any corporation in existence on the effective date\nof this subparagraph (2) the certificate of incorporation of which\nexpressly provides such and with respect to any corporation incorporated\nafter the effective date of this subparagraph (2), the board determines\nthat the loan or guarantee benefits the corporation and either approves\nthe specific loan or guarantee or a general plan authorizing loans and\nguarantees.\n (b) The fact that a loan or guarantee is made in violation of this\nsection does not affect the borrower's liability on the loan.\n