Vermont Statutes Title 11 Sec. 8-33
Terms Used In Vermont Statutes Title 11 Sec. 8-33
- Distribution: means the payment of a dividend or any part of the income or profit of a corporation to its members, directors, or officers. See
- Person: includes any individual or entity. See
- Proceeding: includes civil suit and criminal, administrative, and investigatory action. See
- Statute of limitations: A law that sets the time within which parties must take action to enforce their rights.
§ 8.33. Liability for unlawful distributions; statute of limitations
(a) A director who votes for or assents to a distribution made in violation of this title is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating this title if it is established that the director did not perform his or her duties in compliance with section 8.30 of this title.
(b) A director held liable for an unlawful distribution under subsection (a) of this section is entitled to contribution:
(1) from every other director who voted for or assented to the distribution without complying with the applicable standards of conduct described in section 8.30 of this title; and
(2) from each person who received an unlawful distribution for the amount of the distribution whether or not the person receiving the distribution knew it was made in violation of this title.
(c) A proceeding under this section is barred unless it is commenced within six years after the date on which the effect of the distribution was measured under this title. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)
Vermont Statutes Title 11 Sec. 8-33
Terms Used In Vermont Statutes Title 11 Sec. 8-33
- Articles of incorporation: include amended and restated articles of incorporation, articles of merger, and special charters. See
- 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.
- Distribution: means a direct or indirect transfer of money or other property (except its own shares) or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. See
- Proceeding: includes civil suit and criminal, administrative, and investigatory action. See
- Shareholder: means the person in whose name shares are registered in the records of a corporation or upon presentation for registration are entitled to be registered in the records of a corporation. See
- Statute of limitations: A law that sets the time within which parties must take action to enforce their rights.
§ 8.33. Liability for unlawful distributions; statute of limitations
(a) A director who votes for or assents to a distribution made in violation of section 6.40 of this title or the articles of incorporation is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating section 6.40 or the articles of incorporation if it is established that the director did not perform his or her duties in compliance with section 8.30 of this title.
(b) A director held liable under subsection (a) of this section for an unlawful distribution is entitled to contribution:
(1) from every other director who could be held liable under subsection (a) for the unlawful distribution; and
(2) from each shareholder for the amount the shareholder accepted knowing the distribution was made in violation of section 6.40 of this title or the articles of incorporation.
(c) A proceeding under this section is barred unless it is commenced within six years after the date on which the effect of the distribution was measured under section 6.40(e) of this title. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)