Loans

Question 1

When can a loan be approved by the board?

Answer 1

If the board finds that the loan will benefit the corporation

Question 2

What happens when a director approves an unlawful loan? Or don’t dissent to one if not present at meeting?

Answer 2

The violate their duty to the corporation and are jointly/severally liable for any loss that results.

Question 3

Can a corporation lend money to a director under business corporation law?

Answer 3

Yes, if the loan is approved by the vote of the majority of shares entitled to vote, not counting borrower shares