§ 42-55-5.1 — § 42-55-5.1. Subsidiary corporations.

Rhode Island § 42-55-5.1

• Jurisdiction: Rhode Island
• Title 42: State Affairs and Government
• Ch. 42-55: Rhode Island Housing and Mortgage Finance Corporation

Text

§ 42-55-5.1. Subsidiary corporations.

(a) To further its purposes, the corporation shall have the power to form one or more subsidiary corporations under either § 7-1.2-101 et seq. or § 7-6-1 et seq. in accordance with the procedures therein contained. Each subsidiary corporation shall be governed by the section under which it is formed, provided that each shall be subject to the same restrictions and limitations as to its powers and purposes to which the corporation is subject under this chapter and shall be deemed a state agency only for the purposes of § 42-46-1 et seq. and § 38-2-1 et seq. The corporation may delegate any of its powers, obligations, and duties under this chapter to any subsidiary corporation by inclusion of its powers, obligations, and duties in the articles of incorporation of the subsidiary corporation. Subsidiary corporations so formed shall constitute legal entities separate and distinct from each other, the corporation, and the state. The corporation shall not be liable for the debts or obligations or for any actions or inactions of its subsidiary corporations unless the corporation expressly agrees otherwise in writing. The corporation may make loans or grants to a subsidiary corporation from time to time to enable the subsidiary corporation to carry out its purposes. The commissioners of the corporation shall constitute all of the directors of each subsidiary corporation.

(b) The state, any municipality or any state commission, public authority, agency, officer, department, board, or division authorized and empowered to enter into agreements with, to grant, convey, lease, or otherwise transfer any property to, or to otherwise transact business with the corporation, shall have the same authorization and power to engage in these activities with each subsidiary corporation of the corporation.

(c) Any subsidiary entity of the corporation whose principal purpose is the acquisition or betterment of real property is, subject to the period of limitations set forth in § 9-1-25, liable in actions of tort only to the extent that those actions do not arise from the performance of any functions found or deemed to be essential or discretionary governmental functions. Any recovery in an action or any recovery by any person in one or more of any actions against the subsidiary entity, its directors, employees, or agents shall not exceed one hundred thousand dollars ($100,000) per plaintiff in the absence of fraud or willful misconduct. In the absence of fraud or willful misconduct, the directors are not personally liable to any party on account of any action (whether tort or otherwise) arising from or related to the manner or terms of the disposition of the subsidiary's assets, nor shall the manner or terms of the disposition constitute a defense to any obligation owed to the corporation.

Legislative History

P.L. 1988, ch. 617, § 3; P.L. 2005, ch. 36, § 26; P.L. 2005, ch. 72, § 26; P.L. 2023, ch. 79, art. 6, § 1, effective June 16, 2023.