2025 Session
Last amended: 1981 session
§ 302A.557 — Liability of Shareholders for Illegal Distributions
Plain-Language Summary
Makes shareholders liable to return illegal distributions they received from the corporation.
302A.557 LIABILITY OF SHAREHOLDERS FOR ILLEGAL DISTRIBUTIONS.
§
Subdivision 1.Liability.
A shareholder who receives a distribution made in violation of the provisions of section 302A.551 is liable to the corporation, its receiver or other person winding up its affairs, or a director under section 302A.559, subdivision 2, but only to the extent that the distribution received by the shareholder exceeded the amount that properly could have been paid under section 302A.551. §
Subd. 2.Statute of limitations.
An action shall not be commenced under this section more than two years from the date of the distribution.
History:
History: History:
1981 c 270 s 87
Practical Notes
If a corporation illegally pays dividends, shareholders may have to give the money back.