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November 22, 2024 Mist | 45°F
The 193rd General Court of the Commonwealth of Massachusetts

Section 37: Directors' liability

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:

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.