17:12B-38.1. Association official immunity
235 words·~1 min read·
/nj/title-17/chapter-12b/17-12b-38-1·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
An association may with the approval of the commissioner, amend its certificate of incorporation or bylaws, by a two-thirds vote of its board present and voting at a duly convened regular or special meeting, to provide that a director or officer shall not be personally liable, or shall be liable only to the extent therein provided, to the association or its members for damages for breach of any duty owed to the association or its members, except that the provision shall not relieve a director or officer from liability for an act or omission: a. in breach of that person's duty of loyalty to the association or its members; b. not in good faith or involving a knowing violation of law; or c. resulting in receipt by that person of an improper personal benefit.
As used in this section, an act or omission in breach of a person's duty of loyalty means an act or omission which that person knows or believes to be contrary to the best interests of the association or its members in connection with a matter in which he has a material conflict of interest.
The commissioner shall approve the amendment unless he finds that it unreasonably affects the interest of the members.
This section shall be applicable to federal associations, in addition to State associations, to the extent permitted by federal law.
L. 1987, c. 35, s. 13; amended 1989,c.17,s.9.