{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2026\/code-json\/13.1-692.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2026\/code-text\/13.1-692.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2026\/code-xml\/13.1-692.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2026\/code-html\/13.1-692.html"}],"law_id":346834,"edition_id":2,"section_id":346834,"structure_id":49791,"section_number":"13.1-692","catch_line":"Liability for unlawful distributions","history":"Code 1950, \u00a7\u00a7 13-206, 13-207, 13.1-44; 1956, c. 428; 1985, c. 522; 2005, c. 765; 2019, c. 734.","full_text":"A\n\nA director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to this chapter or the articles of incorporation is personally liable to the corporation and its creditors for the amount of the distribution that exceeds what could have been distributed without violating this chapter or the articles of incorporation if the party asserting liability establishes that when taking the action the director did not comply with § 13.1-690.\n\nB\n\nA director held liable for an unlawful distribution under subsection A is entitled to:\n\n1\n\nContribution from every other director who could be held liable under subsection A for the unlawful distribution; and\n\n2\n\nRecoupment from the shareholders who received the unlawful distribution in proportion to the amounts of such unlawful distribution received by them respectively.\n\nC\n\nNo suit shall be brought against any director for any liability imposed by subsection A except within two years after the right of action shall accrue.\n\nD\n\nContribution or recoupment under subsection B is barred unless it is commenced within one year after the liability of the claimant has been finally adjudicated under subsection A.\n\n","order_by":null,"text":{"0":{"id":1293610,"text":"A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to this chapter or the articles of incorporation is personally liable to the corporation and its creditors for the amount of the distribution that exceeds what could have been distributed without violating this chapter or the articles of incorporation if the party asserting liability establishes that when taking the action the director did not comply with § 13.1-690.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":1293611,"text":"A director held liable for an unlawful distribution under subsection A is entitled to:","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"B1"},"2":{"id":1293612,"text":"Contribution from every other director who could be held liable under subsection A for the unlawful distribution; and","type":"section","prefixes":["B","1"],"prefix":"1","entire_prefix":"B1","prefix_anchor":"B1","level":2,"prior_prefix":"B","next_prefix":"B2"},"3":{"id":1293613,"text":"Recoupment from the shareholders who received the unlawful distribution in proportion to the amounts of such unlawful distribution received by them respectively.","type":"section","prefixes":["B","2"],"prefix":"2","entire_prefix":"B2","prefix_anchor":"B2","level":2,"prior_prefix":"B1","next_prefix":"C"},"4":{"id":1293614,"text":"No suit shall be brought against any director for any liability imposed by subsection A except within two years after the right of action shall accrue.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B2","next_prefix":"D"},"5":{"id":1293615,"text":"Contribution or recoupment under subsection B is barred unless it is commenced within one year after the liability of the claimant has been finally adjudicated under subsection A.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C"}},"ancestry":[{"id":49791,"edition_id":2,"name":"Directors and Officers","identifier":"9","label":"article","depth":3,"order_by":11,"parent_id":49780,"metadata":{"child_laws":27,"child_structures":0},"date_created":"2026-08-02 02:15:20","date_modified":"2026-08-02 12:29:11","permalink":{"id":1378171,"object_type":"structure","relational_id":49791,"identifier":"9","token":"13.1\/9\/9","url":"\/13.1\/9\/9\/","edition_id":2,"permalink":0,"preferred":1}},{"id":49780,"edition_id":2,"name":"Virginia Stock Corporation Act","identifier":"9","label":"chapter","depth":2,"order_by":12,"parent_id":49726,"metadata":{"child_laws":265,"child_structures":27},"date_created":"2026-08-02 02:14:54","date_modified":"2026-08-02 12:29:09","permalink":{"id":1377165,"object_type":"structure","relational_id":49780,"identifier":"9","token":"13.1\/9","url":"\/13.1\/9\/","edition_id":2,"permalink":0,"preferred":1}},{"id":49726,"edition_id":2,"name":"Corporations","identifier":"13.1","label":"title","depth":1,"order_by":44,"parent_id":null,"metadata":{"child_laws":894,"child_structures":104},"date_created":"2026-08-02 02:14:01","date_modified":"2026-08-02 12:29:04","permalink":{"id":1374495,"object_type":"structure","relational_id":49726,"identifier":"13.1","token":"13.1","url":"\/13.1\/","edition_id":2,"permalink":0,"preferred":1}}],"structure_contents":[{"id":346811,"structure_id":49791,"section_number":"13.1-673","catch_line":"Requirement for and duties of board of directors","url":"\/13.1-673\/","token":"13.1\/9\/9\/13.1-673","metadata":false},{"id":346812,"structure_id":49791,"section_number":"13.1-674","catch_line":"Qualifications for directors or for nominees for director","url":"\/13.1-674\/","token":"13.1\/9\/9\/13.1-674","metadata":{"court_decisions":""}},{"id":346813,"structure_id":49791,"section_number":"13.1-675","catch_line":"Number and election of directors","url":"\/13.1-675\/","token":"13.1\/9\/9\/13.1-675","metadata":{"court_decisions":{"0":{"name":"In Re Old Grind Co., Inc.","case_number":"19-70170","citation":"99 B.R. 317","date":"1989-05-25","url":"https:\/\/www.courtlistener.com\/opinion\/2012268\/in-re-old-grind-co-inc\/","abstract":" .\u202f.\u202f. 99 B.R. 317 (1989) .\u202f.\u202f. ","court_html":"United States Bankruptcy Court, W.D. Virginia"}}}},{"id":346814,"structure_id":49791,"section_number":"13.1-676","catch_line":"Election of directors by certain classes or series of shares","url":"\/13.1-676\/","token":"13.1\/9\/9\/13.1-676","metadata":{"court_decisions":""}},{"id":346815,"structure_id":49791,"section_number":"13.1-677","catch_line":"Terms of directors generally","url":"\/13.1-677\/","token":"13.1\/9\/9\/13.1-677","metadata":false},{"id":346816,"structure_id":49791,"section_number":"13.1-678","catch_line":"Staggered terms for directors","url":"\/13.1-678\/","token":"13.1\/9\/9\/13.1-678","metadata":false},{"id":346817,"structure_id":49791,"section_number":"13.1-679","catch_line":"Resignation of directors","url":"\/13.1-679\/","token":"13.1\/9\/9\/13.1-679","metadata":false},{"id":346818,"structure_id":49791,"section_number":"13.1-680","catch_line":"Removal of directors by shareholders","url":"\/13.1-680\/","token":"13.1\/9\/9\/13.1-680","metadata":{"court_decisions":""}},{"id":346820,"structure_id":49791,"section_number":"13.1-681","catch_line":"Repealed","url":"\/13.1-681\/","token":"13.1\/9\/9\/13.1-681","metadata":false},{"id":346819,"structure_id":49791,"section_number":"13.1-681.1","catch_line":"Removal of directors by judicial proceeding","url":"\/13.1-681.1\/","token":"13.1\/9\/9\/13.1-681.1","metadata":false},{"id":346821,"structure_id":49791,"section_number":"13.1-682","catch_line":"Vacancy on board of directors","url":"\/13.1-682\/","token":"13.1\/9\/9\/13.1-682","metadata":false},{"id":346822,"structure_id":49791,"section_number":"13.1-683","catch_line":"Compensation of directors","url":"\/13.1-683\/","token":"13.1\/9\/9\/13.1-683","metadata":false},{"id":346823,"structure_id":49791,"section_number":"13.1-684","catch_line":"Meetings of the board of directors","url":"\/13.1-684\/","token":"13.1\/9\/9\/13.1-684","metadata":{"court_decisions":""}},{"id":346824,"structure_id":49791,"section_number":"13.1-685","catch_line":"Action without meeting of board of directors","url":"\/13.1-685\/","token":"13.1\/9\/9\/13.1-685","metadata":false},{"id":346825,"structure_id":49791,"section_number":"13.1-686","catch_line":"Notice of board of directors' meetings","url":"\/13.1-686\/","token":"13.1\/9\/9\/13.1-686","metadata":false},{"id":346826,"structure_id":49791,"section_number":"13.1-687","catch_line":"Waiver of notice by director","url":"\/13.1-687\/","token":"13.1\/9\/9\/13.1-687","metadata":false},{"id":346827,"structure_id":49791,"section_number":"13.1-688","catch_line":"Quorum and voting by directors","url":"\/13.1-688\/","token":"13.1\/9\/9\/13.1-688","metadata":false},{"id":346828,"structure_id":49791,"section_number":"13.1-689","catch_line":"Committees","url":"\/13.1-689\/","token":"13.1\/9\/9\/13.1-689","metadata":false},{"id":346830,"structure_id":49791,"section_number":"13.1-690","catch_line":"General standards of conduct for director","url":"\/13.1-690\/","token":"13.1\/9\/9\/13.1-690","metadata":{"court_decisions":{"0":{"name":" .\u202f.\u202f. 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The record of this law\u2019s original creation isn\u2019t available online. It has been modified 4 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1956, chapter 428; in 1985, chapter 522; in 2005, chapter 765<\/a>; in 2019, chapter 734<\/a>.<\/p>","references":false,"refers_to":[{"id":346830,"section_number":"13.1-690","catch_line":"General standards of conduct for director","order_by":null,"url":"\/13.1-690\/"}],"permalink":{"id":1378261,"object_type":"law","relational_id":346834,"identifier":"13.1-692","token":"13.1\/9\/9\/13.1-692","url":"\/13.1-692\/","edition_id":2,"permalink":0,"preferred":1},"url":"\/13.1-692\/","token":"13.1\/9\/9\/13.1-692","dublin_core":{"Title":"Liability for unlawful distributions","Type":"Text","Format":"text\/html","Identifier":"\u00a7 13.1-692","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> A director who votes for or assents to a distribution<\/span> in excess of what may be authorized and made pursuant to this chapter or the articles of incorporation<\/span> is personally liable to the corporation<\/span> and its creditors<\/span> for the amount of the distribution<\/span> that exceeds what could have been distributed without violating this chapter or the articles of incorporation<\/span> if the party<\/span> asserting liability establishes that when taking the action the director did not comply with § 13.1-690<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> A director held liable for an unlawful distribution<\/span> under subsection A is entitled to: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Contribution from every other director who could be held liable under subsection A for the unlawful distribution<\/span>; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Recoupment from the shareholders<\/span> who received the unlawful distribution<\/span> in proportion to the amounts of such unlawful distribution<\/span> received by them respectively. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> No suit shall be brought against any director for any liability imposed by subsection A except within two years after the right of action shall accrue. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> Contribution or recoupment under subsection B is barred unless it is commenced within one year after the liability of the claimant has been finally adjudicated under subsection A. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nLIABILITY FOR UNLAWFUL DISTRIBUTIONS (\u00a7 13.1-692)\n\nA. A director who votes for or assents to a distribution in excess of what may\nbe authorized and made pursuant to this chapter or the articles of incorporation\nis personally liable to the corporation and its creditors for the amount of the\ndistribution that exceeds what could have been distributed without violating\nthis chapter or the articles of incorporation if the party asserting liability\nestablishes that when taking the action the director did not comply with §\n13.1-690.\n\nB. A director held liable for an unlawful distribution under subsection A is\nentitled to:\n\n 1. Contribution from every other director who could be held liable under\n subsection A for the unlawful distribution; and\n\n 2. Recoupment from the shareholders who received the unlawful distribution in\n proportion to the amounts of such unlawful distribution received by them\n respectively.\n\nC. No suit shall be brought against any director for any liability imposed by\nsubsection A except within two years after the right of action shall accrue.\n\nD. Contribution or recoupment under subsection B is barred unless it is\ncommenced within one year after the liability of the claimant has been finally\nadjudicated under subsection A.\n\nHISTORY: Code 1950, \u00a7\u00a7 13-206, 13-207, 13.1-44; 1956, c. 428; 1985, c. 522;\n2005, c. 765; 2019, c. 734.","edition":{"id":2,"name":"2026","slug":"2026","date_created":"2026-07-16 18:40:23","date_modified":"2026-08-02 15:14:36","current":1,"order_by":2,"last_import":"2026-08-02 12:37:30"}}