(a) Except as provided by subsection (c), a corporation may not directly or indirectly 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.
HISTORY: Derived from 1976 Code Section 33-13-170 [1962 Code Section 12-18.17; 1962 (52) 1996; 1981 Act No. 146, Section 2; Repealed, 1988 Act No. 444, Section 2]; 1988 Act No. 444, Section 2.