Minnesota Statutes Business, Social, and Charitable Organizations (Ch. 300-323A) § 317A.501. Loans; guarantees; suretyship

Subdivision 1. Prerequisites. A corporation may lend money to, guarantee or pledge its assets as security for 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 board and:

Subd. 2. Limitation on loans and guarantees for officers, directors, and employees. A corporation may not lend money to or guarantee the obligation of a director, officer, or employee of the corporation or a related organization, or of the spouse, parents, children and spouses of children, brothers and sisters or spouses of brothers and sisters of the director, officer, or employee, unless the loan or guarantee may reasonably be expected, in the judgment of the board, to benefit the corporation. If a loan or guarantee is made in violation of this subdivision, the borrower's liability on the loan is not affected. The officers and directors who make a loan in violation of this subdivision or assent to it are jointly and severally liable for its repayment. This subdivision does not prohibit an advance of money for expenses authorized bysection 317A.505.

Subd. 3. Interest; security. A loan, guaranty, surety contract, or other financial assistance under subdivision 1 or 2 may be with or without interest and may be unsecured or secured.

Subd. 4. Banking authority not granted. This section does not grant authority to act as a bank or to carry on the business of banking.