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North Dakota Century Code Title 10. Corporations § 10-19.1-89. Loans--Guarantees--Suretyship

Current as of January 01, 2024 | Updated by Findlaw Staff

1. 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 any person, if the transaction, or a class of transactions to which the transaction belongs, is approved by the board 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, a person or organization with which the corporation has a business relationship in the usual and regular course of business, or an organization to which the corporation has the power to make donations;

c. Is with, or for the benefit of, an officer or director or other employee of the corporation or a related organization, 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.

2. A loan, guarantee, surety contract, or other financial assistance under subsection 1 may be with or without interest and may be unsecured or may be secured in any manner, including a grant of a security interest in shares of the corporation.

3. This section does not grant any authority to act as a bank or to carry on the business of banking.

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Cite this article: FindLaw.com - North Dakota Century Code Title 10. Corporations § 10-19.1-89. Loans--Guarantees--Suretyship - last updated January 01, 2024 | https://codes.findlaw.com/nd/title-10-corporations/nd-cent-code-sect-10-19-1-89/

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