2C:21-9. Misconduct by corporate official

424 words·~2 min read·/nj/title-2c/chapter-21/2c-21-9

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

A person is guilty of a crime when:

a. Being a director of a corporation, he knowingly with purpose to defraud, concurs in any vote or act of the directors of such corporation, or any of them, which has the purpose of:

(1)Making a dividend except in the manner provided by law;

(2)Dividing, withdrawing or in any manner paying to any stockholder any part of the capital stock of the corporation except in the manner provided by law;

(3)Discounting or receiving any note or other evidence of debt in payment of an installment of capital stock actually called in and required to be paid, or with purpose of providing the means of making such payment;

(4)Receiving or discounting any note or other evidence of debt with purpose of enabling any stockholder to withdraw any part of the money paid in by him on his stock; or

(5)Applying any portion of the funds of such corporation, directly or indirectly, to the purchase of shares of its own stock, except in the manner provided by law; or

b. Being a director or officer of a corporation, he, with purpose to defraud:

(1)Issues, participates in issuing, or concurs in a vote to issue any increase of its capital stock beyond the amount of the capital stock thereof, duly authorized by or in pursuance of law; or

(2)Sells, or agrees to sell, or is directly interested in the sale of any share of stock of such corporation, or in any agreement to sell the same, unless at the time of such sale or agreement he is an actual owner of such share, provided that the foregoing shall not apply to a sale by or on behalf of an underwriter or dealer in connection with a bona fide public offering of shares of stock of such corporation.

c. He purposely or knowingly uses, controls or operates a corporation for the furtherance or promotion of any criminal object.

If the benefit derived from a violation of this section is $75,000.00, or more, the offender is guilty of a crime of the second degree. If the benefit derived exceeds $1,000.00, but is less than $75,000.00, the offender is guilty of a crime of the third degree. If the benefit derived is $1,000.00, or less, the offender is guilty of a crime of the fourth degree.

L.1978, c. 95, s. 2C:21-9, eff. Sept. 1, 1979. Amended by L.1979, c. 178, s. 37, eff. Sept. 1, 1979; L.1981, c. 290, s. 24, eff. Sept. 24, 1981.