Louisiana Revised Statutes 12:1-853 – Advance for expenses
Terms Used In Louisiana Revised Statutes 12:1-853
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Quorum: The number of legislators that must be present to do business.
A. A corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse expenses incurred in connection with the proceeding by an individual who is a party to the proceeding because that individual is a member of the board of directors if the director delivers to the corporation both of the following:
(1) A written affirmation of the director’s good faith belief that the relevant standard of conduct described in La. Rev. Stat. 12:1-851 has been met by the director or that the proceeding involves conduct for which liability has been eliminated under La. Rev. Stat. 12: 1-832.
(2) A written undertaking of the director to repay any funds advanced if the director is not entitled to mandatory indemnification under La. Rev. Stat. 12:1-852 and it is ultimately determined under La. Rev. Stat. 12:1-854 or 1-855 that the director has not met the relevant standard of conduct described in La. Rev. Stat. 12:1-851.
B. The undertaking required by Paragraph (A)(2) of this Section must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to the financial ability of the director to make repayment.
C. Authorizations under this Section shall be made by one of the following:
(1) By the board of directors in either of the following manners:
(a) If there are two or more qualified directors, by a majority vote of all the qualified directors, a majority of whom shall for such purpose constitute a quorum, or by a majority of the members of a committee of two or more qualified directors appointed by such a vote.
(b) If there are fewer than two qualified directors, by the vote necessary for action by the board in accordance with La. Rev. Stat. 12:1-824(C), in which authorization directors who are not qualified directors may participate.
(2) By the shareholders, except that shares owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the authorization.
Acts 2014, No. 328, §1, eff. Jan. 1, 2015.