Pennsylvania Consolidated & Unconsolidated Statutes
Chapter 15 - Corporate Powers, Duties and Safeguards
Section 1553 - Liability for unlawful dividends and other distributions


(a) Directors.--Except as otherwise provided pursuant to section 1713 (relating to personal liability of directors), a director who votes for or assents to any dividend or other distribution contrary to the provisions of this subpart or contrary to any restrictions contained in the bylaws shall, if he has not complied with the standard provided in or pursuant to section 1712 (relating to standard of care, justifiable reliance and business judgment rule), be liable to the corporation, jointly and severally with all other directors so voting or assenting, for the amount of the dividend that is paid or the value of the other distribution in excess of the amount of the dividend or other distribution that could have been made without a violation of the provisions of this subpart or the restrictions in the bylaws.
(b) Contribution by shareholders.--Any director against whom a claim is asserted under or pursuant to this section for the making of a distribution and who is held liable thereon shall be entitled to contribution from the shareholders who accepted or received any such distribution, knowing the distribution to have been made in violation of this subpart, in proportion to the amounts received by them.
(c) Contribution by other directors.--Any director against whom a claim is asserted under or pursuant to this section shall be entitled to contribution from any other director who voted for or assented to the action upon which the claim is asserted and who did not comply with the standard provided by or pursuant to this subpart for the performance of the duties of directors.
(d) Limitation of actions.--See 42 Pa.C.S. § 5524(5) (relating to two year limitation).
(e) Contrary articles ineffective.--Except as provided by subsection (a), this section may not be varied by any provision of the articles.
(Dec. 19, 1990, P.L.834, No.198, eff. imd.; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days)

2022 Amendment. Act 122 amended subsec. (a).
1990 Amendment. Act 198 amended subsec. (a) and added subsec. (e).

Structure Pennsylvania Consolidated & Unconsolidated Statutes

Pennsylvania Consolidated & Unconsolidated Statutes

Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS

Chapter 15 - Corporate Powers, Duties and Safeguards

Extra - Chapter Notes

Section 1501 - Corporate capacity

Section 1502 - General powers

Section 1503 - Defense of ultra vires

Section 1504 - Adoption, amendment and contents of bylaws

Section 1505 - Persons bound by bylaws

Section 1506 - Form of execution of instruments

Section 1507 - Registered office

Section 1508 - Corporate records; inspection by shareholders

Section 1509 - Bylaws and other powers in emergency

Section 1510 - Certain specifically authorized debt terms

Section 1511 - Additional powers of certain public utility corporations

Section 1512 - Informational rights of a director

Section 1513 - Forum selection provisions

Section 1521 - Authorized shares

Section 1522 - Issuance of shares in classes or series; board action

Section 1523 - Pricing and issuance of shares

Section 1524 - Payment for shares

Section 1525 - Stock rights and options

Section 1526 - Liability of shareholders

Section 1527 - Issuance of fractional shares or scrip

Section 1528 - Shares represented by certificates and uncertificated shares

Section 1529 - Transfer of securities; restrictions

Section 1530 - Preemptive rights of shareholders

Section 1531 - Voting powers and other rights of certain securityholders and other entities

Section 1532 - Effect of failure to surrender securities converted by reorganization

Section 1551 - Distributions to shareholders

Section 1552 - Power of corporation to acquire its own shares

Section 1553 - Liability for unlawful dividends and other distributions

Section 1554 - Financial reports to shareholders

Section 1571 - Application and effect of subchapter

Section 1572 - Definitions

Section 1573 - Record and beneficial holders and owners

Section 1574 - Notice of intention to dissent

Section 1575 - Notice to demand payment

Section 1576 - Failure to comply with notice to demand payment, etc

Section 1577 - Release of restrictions or payment for shares

Section 1578 - Estimate by dissenter of fair value of shares

Section 1579 - Valuation proceedings generally

Section 1580 - Costs and expenses of valuation proceedings