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Maryland Code, Corporations and Associations § 2-312

Current as of January 01, 2025 | Updated by Findlaw Staff

(a) If it is established that the director's duties were not performed in compliance with § 2-405.1 of this title, a director who votes for or assents to a distribution made in violation of the charter or § 2-311 of this subtitle is personally liable to the corporation for the amount of the distribution that exceeds what could have been made without violating the charter or § 2-311 of this subtitle.

(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) of this section for the unlawful distribution; and

(2) From each stockholder for the amount the stockholder accepted knowing the distribution was made in violation of the charter or § 2-311 of this subtitle.

(c)(1) A proceeding to enforce the liability of a director under subsection (a) of this section may not begin more than 3 years after the date on which the effect of the distribution was measured under § 2-311(c) or (e) of this subtitle.

(2) A proceeding to enforce contribution under subsection (b) of this section may not begin more than 1 year after the liability of the director claiming contribution has been finally adjudicated under subsection (a) of this section.

(d) The liabilities imposed by this section are in addition to any other liability imposed by law on the directors of a corporation.

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Cite this article: FindLaw.com - Maryland Code, Corporations and Associations § 2-312 - last updated January 01, 2025 | https://codes.findlaw.com/md/corporations-and-associations/md-code-corp-and-assns-sect-2-312/

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