2019 Tennessee Code
Title 48 - Corporations and Associations
Nonprofit Corporations
Chapter 58 - Directors and Officers
Part 3 - Standards of Conduct
§ 48-58-303. Loans to or guarantees for directors and officers.

Universal Citation: TN Code § 48-58-303 (2019)
  • (a) A corporation may not lend money to or guarantee the obligation of a director or officer of the corporation.

  • (b) This section does not apply to loans and guarantees authorized or permitted by any other statute that regulates any special class of corporation.

  • (c) This section does not apply to:

    • (1) Advances to pay reimbursable expenses reasonably expected to be incurred by a director or officer;

    • (2) Advances to pay premiums on life insurance if the advance is secured by the cash value of the policy;

    • (3) Advances pursuant to part 5 of this chapter;

    • (4) Loans or advances pursuant to employee benefit plans; or

    • (5) Loans to pay relocation expenses.

  • (d) Neither a sale on credit in the ordinary course of business nor a life insurance policy loan shall be subject to the restrictions of this section.

  • (e) The fact that a loan or guarantee is made in violation of this section does not affect the borrower's liability on the loan.

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