Massachusetts General Laws ch. 156 sec. 37 – Directors’ liability
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Section 37. The directors of every corporation shall be jointly and severally liable for the debts and contracts of the corporation in the following cases:
Terms Used In Massachusetts General Laws ch. 156 sec. 37
- 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.
First. For declaring or assenting to a dividend if the corporation is, or thereby is rendered, bankrupt or insolvent, to the extent of such dividend.
Second. For debts contracted between the time of making or assenting to a loan to a stockholder or director and the time of its repayment, to the extent of such loan.
Directors who vote against declaring said dividend or who vote against making said loan shall not be liable as aforesaid.