Loans to Directors

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Section 8.32. LOANS TO DIRECTORS

(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 specific 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 shall not affect the borrower's liability on the loan.

(c) This section shall not apply to loans and guarantees authorized by statute regulating any special class of corporations.


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