TITLE 7
Corporations, Associations, and Partnerships

CHAPTER 7-1.2
Rhode Island Business Corporation Act

PART 7-1.2-801
Directors and Officers

SECTION 7-1.2-811


§ 7-1.2-811 Liability of directors in certain cases.

(a) In addition to any other liabilities imposed by law upon directors of a corporation:

(1) Directors of a corporation who vote for or assent to the declaration of any dividend or other distribution of the assets of a corporation to its shareholders contrary to the provisions of this chapter or contrary to any restrictions contained in the articles of incorporation, are jointly and severally liable to the corporation for the amount of the dividend which is paid or the value of the assets which are distributed in excess of the amount of the dividend or distribution which could have been paid or distributed without a violation of the provisions of this chapter or the restrictions in the articles of incorporation.

(2) Directors of a corporation who vote for or assent to the purchase of its own shares contrary to the provisions of this chapter are jointly and severally liable to the corporation for the amount of consideration paid for the shares which is in excess of the maximum amount which could have been paid for the shares without a violation of the provisions of this chapter.

(3) Directors of a corporation who vote for or assent to any distribution of assets of a corporation to its shareholders during the liquidation of the corporation without the payment and discharge of, or making adequate provision for, all known debts, obligations, and liabilities of the corporation are jointly and severally liable to the corporation for the value of the assets which are distributed, to the extent that the debts, obligations, and liabilities of the corporation are not subsequently paid and discharged.

(b) A director who is present at a meeting of its board of directors at which action on any corporate matter is taken is presumed to have assented to the action taken unless his or her dissent is entered in the minutes of the meeting or unless he or she files his or her written dissent to the action with the person acting as the secretary of the meeting before the meeting's adjournment or forwards the dissent by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. The right to dissent does not apply to a director who voted in favor of the action.

(c) A director is not liable under this section if under the circumstances he or she acted with due care and in good faith, and without limiting the generality of what has just been stated, is not liable if he or she relied in good faith upon financial statements of the corporation represented to him or her to be correct and to be based upon generally accepted accounting principles by the president or the officer of the corporation having charge of its books of account, or stated in a written report by an independent public or certified public accountant or firm of accountants fairly to reflect the financial condition of the corporation.

(d) Any director against whom a claim is asserted under or pursuant to this section for the payment of a dividend or other distribution of assets of a corporation and who is held liable on the claim, is entitled to contribution from the shareholders who accepted or received any dividend or assets, knowing the dividend or distribution to have been made in violation of this chapter, in proportion to the amounts received by them respectively.

History of Section.
(P.L. 2004, ch. 216, § 2; P.L. 2004, ch. 274, § 2; P.L. 2005, ch. 120, § 1; P.L. 2005, ch. 130, § 1.)