Marjorie is a member of the board of directors of Techno Ko Corp.She would like to have the corporation lend her some money so that she can begin another business venture.Which of the following is correct regarding loans of a corporation to one of its directors?
A) The Model Act permits a corporation to lend money to its directors with a majority vote of the other directors.
B) The Sarbanes-Oxley Act prohibits any publicly held corporation from making personal loans to its directors or executive officers,with certain limited exceptions.
C) Both the Model Act and the Revised Act prohibit loans to directors in all cases.
D) The Sarbanes-Oxley Act permits a publicly held corporation to make personal loans to its directors or executive officers only with the consent of the shareholders.

Question

Quizplus · Accepted Answer

The Sarbanes-Oxley Act prohibits any publicly held corporation from making personal loans to its directors or executive officers, with certain limited exceptions. Techno Ko Corp is not mentioned as a privately held corporation, so we must assume that it is publicly held. Therefore, it is not permissible for the corporation to lend money to Marjorie, who is a member of the board of directors.

Marjorie Is a Member of the Board of Directors of Techno