North Dakota Code 10-19.1-89 – Loans – Guarantees – Suretyship
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:
Terms Used In North Dakota Code 10-19.1-89
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Organization: includes a foreign or domestic association, business trust, corporation, enterprise, estate, joint venture, limited liability company, limited liability partnership, limited partnership, partnership, trust, or any legal or commercial entity. See North Dakota Code 1-01-49
- Person: means an individual, organization, government, political subdivision, or government agency or instrumentality. See North Dakota Code 1-01-49
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.