§ 55-8-32. Loans to directors. - North Carolina Statutes

§55‑8‑32.  Loans to directors.

(a)        Except as providedby subsection (c), a corporation may not directly or indirectly lend money toor guarantee the obligation of a director of the corporation unless:

(1)        The particular loanor guarantee is approved by a majority of the votes represented by theoutstanding 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 benefiteddirector; or

(2)        The corporation'sboard of directors determines that the loan or guarantee benefits thecorporation and either approves the specific loan or guarantee or a generalplan authorizing loans and guarantees.

(b)        The fact that aloan or guarantee is made in violation of this section does not affect the borrower'sliability on the loan.

(c)        This section doesnot apply to loans and guarantees authorized by statute regulating any specialclass of corporations.

(d)        For purposes ofthis section, a loan or guarantee is made indirectly to or for a director if suchdirector has an indirect interest in the loan or guarantee as defined in G.S.55‑8‑31 (b). (1955, c. 1371, s. 1; 1959, c. 1316, s. 6; 1961, c.198; 1969, c. 751, s. 9; 1989, c. 265, s. 1.)