Tennessee § 56-3-109 Dividends - Illegal division - Directors' liability to creditors

Tennessee Statutes

§ 56-3-109 — Dividends - Illegal division - Directors' liability to creditors

Tennessee § 56-3-109

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This text of Tennessee § 56-3-109 (Dividends - Illegal division - Directors' liability to creditors) is published on Counsel Stack Legal Research, covering Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Tenn. Code Ann. § 56-3-109 (2026).

Text

Moneys received as premiums upon risks undetermined and outstanding, at the time of declaring any dividend, shall not be considered as profits, earned and divided as such; and if any loss should happen impairing the capital stock, no dividend shall be declared until the capital stock is made good; and if a dividend is declared, contrary to this prohibition, the directors consenting to the dividend shall be liable to make good to the creditors of the company, if their claims cannot otherwise be satisfied, the amount of dividends thus illegally divided.

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Moneys received as premiums upon risks undetermined and outstanding, at the time of declaring any dividend, shall not be considered as profits, earned and divided as such; and if any loss should happen impairing the capital stock, no dividend shall be declared until the capital stock is made good; and if a dividend is declared, contrary to this prohibition, the directors consenting to the dividend shall be liable to make good to the creditors of the company, if their claims cannot otherwise be satisfied, the amount of dividends thus illegally divided.