Section 302A.501 Loans; Guarantees; Suretyship
302A.501 LOANS; GUARANTEES; SURETYSHIP.
Subdivision 1.Prerequisites.
A corporation may lend money to, guarantee an obligation of, become a surety for, or otherwise financially assist a person, if the transaction, or a class of transactions to which the transaction belongs, is approved by the affirmative vote of a majority of the directors present and:
(a) is in the usual and regular course of business of the corporation;
(b) is with, or for the benefit of, a related organization, an organization in which the corporation has a financial interest, an organization with which the corporation has a business relationship, or an organization to which the corporation has the power to make donations, any of which relationships constitute consideration sufficient to make the loan, guarantee, suretyship, or other financial assistance so approved enforceable against the corporation;
(c) is with, or for the benefit of, an officer or other employee of the corporation or a subsidiary, including an officer or employee who is a director of the corporation or a subsidiary, and may reasonably be expected, in the judgment of the board, to benefit the corporation; or
(d) whether or not any separate consideration has been paid or promised to the corporation, has been approved by (1) the holders of two-thirds of the voting power of the shares entitled to vote which are owned by persons other than the interested person or persons, or (2) the unanimous affirmative vote of the holders of all outstanding shares, whether or not entitled to vote.
Subd. 2.Interest; security.
A loan, guaranty, surety contract, or other financial assistance under subdivision 1 may be with or without interest and may be unsecured or may be secured in any manner, including, without limitation, a grant of a security interest in shares of the corporation.
Subd. 3.Banking authority not granted.
This section does not grant any authority to act as a bank or to carry on the business of banking.
History:
1981 c 270 s 82; 1987 c 104 s 34; 1993 c 17 s 43; 1993 c 137 s 13