491.41 - DIVERSION OF FUNDS -- UNLAWFUL DIVIDENDS.
491.41 DIVERSION OF FUNDS -- UNLAWFUL DIVIDENDS. The diversion of the funds of the corporation to other objects than those mentioned in its articles and in the notice published, if any person be injured thereby, and the payment of dividends which leaves insufficient funds to meet the liabilities thereof, shall be such fraud as will subject those guilty thereof to the penalties of section 491.40; and such dividends, or their equivalent, in the hands of stockholders, shall be subject to such liabilities. If the directors or other officers or agents of any corporation shall declare and pay any dividend when such corporation is known by them to be insolvent, or any dividend the payment of which would render it insolvent, or which would diminish the amount of its capital stock, all directors, officers, or agents knowingly consenting thereto shall be jointly and severally liable for all the debts of such corporation then existing, but dividends made in good faith before knowledge of the occurring of losses shall not come within the provisions of this section.
Section History: Early Form [C51, § 687, 688; R60, § 1164, 1165; C73, § 1072, 1073; C97, § 1621; C24, 27, 31, 35, 39, § 8378; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, § 491.41] Referred to in § 491.42