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Official Code of Georgia Annotated

Title 14. CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS · Chapter 2. BUSINESS CORPORATIONS · Article 8. DIRECTORS AND OFFICERS · Part 3. STANDARDS OF CONDUCT

14-2-832. Liability for unlawful distributions.

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Current through: Including Acts of the 2025 Regular Session of the General Assembly.

  1. (a)

    A director who votes for or assents to a distribution made in violation of Code Section 14-2-640 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 Code Section 14-2-640 or the articles of incorporation if it is established that he did not perform his duties in compliance with Code Section 14-2-830. In any proceeding commenced under this Code section, a director has all of the defenses ordinarily available to a director.#

  2. (b)

    A director held liable under subsection (a) of this Code section for an unlawful distribution is entitled to contribution:#

    1. (1)

      From every other director who could be held liable under subsection (a) of this Code section for the unlawful distribution; and#

    2. (2)

      From each shareholder for the amount the shareholder accepted knowing the distribution was made in violation of Code Section 14-2-640 or the articles of incorporation.#

  3. (c)

    A proceeding under this Code section is barred unless it is commenced within two years after the date on which the effect of the distribution was measured under subsection (e) or (g) of Code Section 14-2-640.#

The notes below are printed with the section but are not enacted law (O.C.G.A. § 1-1-1(c)). They are shown apart from the text.

History

Code 1981, § 14-2-831, enacted by Ga. L. 1988, p. 1070, § 1; Code 1981, § 14-2-832, as redesignated by Ga. L. 1989, p. 946, § 33.

Editor's notes

Ga. L. 1989, p. 946, § 33, effective July 1, 1989, renumbered former Code Section 14-2-831 as present Code Section 14-2-832.

Read the official page (the state's PDF, opened at the page this text was read from).

Current through: Including Acts of the 2025 Regular Session of the General Assembly.

Text read from t14-(v12)-2017-pdf.pdf, Volume V12, 2017 edition, page 255; merge action: carried; file SHA-256 f2fad2b71b39.