Title 4, Economic Resources

Special Procedures for Third Party Summons. (a) Notice. (1) In General. If any summons to which this section applies requires the giving of testimony on or relating to, the production of any portion of records made or kept on or relating to, or the production of any computer soft…

Fees and Costs for Witnesses. (a) In General. The Secretary may by regulation establish the rates and conditions under which payment may be made of: (1) Fees and mileage to persons who are summoned to appear before the Secretary, and (2) Reimbursement for such costs that are reas…

Requirement for and Duties of Board of Directors. (a) Except as provided in subsection (c) of this section, each corporation must have a board of directors. (b) All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation m…

Qualifications of Directors. The articles of incorporation or bylaws may prescribe qualifications for directors. A director need not be a resident of the Commonwealth or a shareholder of the corporation unless the articles of incorporation or bylaws so prescribe. Source: PL 10-7,…

Number and Election of Directors. (a) If a board of directors has power to fix or change the number of directors, the board may increase or decrease by 30 percent or less the number of directors last approved by the shareholders, but only the shareholders may increase or decrease…

Election of Directors by Certain Classes of Shareholders. If the articles of incorporation authorize dividing the shares into classes, the articles may also authorize the election of all or a specified number of directors by the holders of one or more authorized classes of shares…

Terms of Directors Generally. (a) The terms of the initial directors of a corporation expire at the first shareholders’ meeting at which directors are elected. (b) The terms of all other directors expire at the next annual shareholders’ meeting following their election unless the…

Staggered Terms for Directors. If there are nine or more directors, the articles of incorporation may provide for staggering their terms by dividing the total number of directors into two or three groups, with each group containing one-half or one-third of the total, as near as m…

Resignation of Directors. (a) A director may resign at any time by delivering written notice to the board of directors, its chairman, or to the corporation. (b) A resignation is effective when the notice is delivered unless the notice specifies a later effective date. Source: PL …

Removal of Directors by Shareholders. (a) The shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause. (b) If a director is elected by a voting group of shareholders, only the sh…

Removal of Directors by Judicial Proceeding. (a) The Commonwealth Superior Court may remove a director of the corporation from office in a proceeding commenced either by the corporation or by its shareholders holding at least 10 percent of the outstanding shares of any class if t…

Vacancy on Board. (a) Unless the articles of incorporation provide otherwise, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors: (1) The shareholders may fill the vacancy; (2) The board of directors may fill the…

Compensation of Directors. Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors. Source: PL 10-7, § 1 (Bus. Corp. Reg. § 8.11).

Meetings. (a) The board of directors may hold regular or special meetings in or out of the Commonwealth. (b) Unless the articles of incorporation or bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by,…

Action Without Meeting. (a) Unless the articles of incorporation or bylaws provide otherwise, action required or permitted by this part to be taken at a board of director’s meeting may be taken without a meeting if the action is taken by all members of the board. The action must …

Notice of Meeting. (a) Unless the articles of incorporation or bylaws provide otherwise, regular meetings of the board of directors may be held without notice of the date, time, place, or purpose of the meeting. (b) Unless the articles of incorporation or bylaws provide for a lon…

Waiver of Notice. (a) A director may waive any notice required by this part, the articles of incorporation, or bylaws before or after the date and time stated in the notice. Except as provided by subsection (b) of this section, the waiver must be in writing, signed by the directo…

Quorum and Voting. (a) Unless the articles of incorporation or bylaws require a greater number, a quorum of a board of directors consists of: (1) A majority of the fixed number of directors if the corporation has a fixed board size; or (2) A majority of the number of directors pr…

Committees. (a) Unless the articles of incorporation or bylaws provide otherwise, a board of directors may create one or more committees and appoint members of the board of directors to serve on them. Each committee may have two or more members, who serve at the pleasure of the b…

General Standards for Directors. (a) A director shall discharge his duties as a director, including his duties as a member of a committee: (1) In good faith; (2) With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and (3) In a…

Director Conflict of Interest. (a) A conflict of interest transaction is a transaction with the corporation in which a director of the corporation has a direct or indirect interest. A conflict of interest transaction is not voidable by the corporation solely because of the direct…

Loans to Directors. (a) Except as provided by subsection (c) of this section, a corporation may not lend money to or guarantee the obligation of a director of the corporation unless: (1) The particular or guarantee is approved by a majority of the votes represented by the outstan…

Liability for Unlawful Distributions. (a) A director who votes for or assents to a distribution made in violation of 4 CMC § 4381 or the articles of incorporation is personally liable to the corporation for the amount of distribution that exceeds what could have been distributed …

Required Officers. (a) A corporation has the officers described in its bylaws or appointed by the board of directors in accordance with the bylaws. (b) A duly appointed officer may appoint one or more officers or assistant officers if authorized by the bylaws or the board of dire…

Duties of Officers. Each officer has the authority and shall perform the duties set forth in the bylaws or, to the extent consistent with the bylaws, the duties prescribed by the board of directors or by direction of an officer authorized by the board of directors to prescribe th…

Standards of Conduct for Officers. (a) An officer with discretionary authority shall discharge his duties under that authority: (1) In good faith; (2) With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and (3) In a manner he …

Resignation and Removal of Officers. (a) An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is delivered unless the notice specifies a later effective date. If a resignation is made effective at a later date and t…

Contract Rights of Officers. (a) The appointment of an officer does not itself create contract rights. (b) An officer’s removal does not affect the officer’s contract rights, if any, with the corporation. An officer’s resignation does not affect the corporation’s contract rights,…

Article Definitions. (a) “Corporation” includes any domestic or foreign predecessor entity of a corporation in a merger or other transaction in which the predecessor’s existence ceased upon consummation of the transaction. (b) “Director” means an individual who is or was a direct…

Authority to Indemnify. (a) Except as provided in subsection (d) of this section, a corporation may indemnify an individual made a party to a proceeding because he is or was a director against liability incurred in the proceeding if: (1) He conducted himself in good faith; and (2…

Mandatory Indemnification. Unless limited by its articles of incorporation, a corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he is or was a director of the corporation …

Advance for Expenses. (a) A corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if: (1) The director furnishes the corporation a written affirmation of his good faith …

Court-Ordered Indemnification. Unless a corporation’s articles of incorporation provide otherwise, a director of the corporation who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On r…

Determination and Authorization of Indemnification. (a) A corporation may not indemnify a director under 4 CMC § 4492 unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because he has…

Indemnification of Officers, Employees, and Agents. Unless a corporation’s articles of incorporation provide otherwise: (1) An officer of the corporation who is not a director is entitled to mandatory indemnification under 4 CMC § 4493, and is entitled to apply for courtordered i…

Insurance. A corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the corporation, or who, while a director, officer, employee, or agent of the corporation, is or was serving at the request of the corp…

Application of Article. (a) A provision treating a corporation’s indemnification of or advance for expenses to directors that is contained in its articles of incorporation, bylaws, a resolution of its shareholders or board of directors, or in a contract or otherwise, is valid onl…

Events Causing Dissolution and Winding Up of Company’s Business. (a) A limited liability company is dissolved, and its business must be wound up, upon the occurrence of any of the following events: (1) An event specified in the operating agreement; (2) Consent of the number or pe…

Limited Liability Company Continues After Dissolution. (a) Subject to subsection (b), a limited liability company continues after dissolution only for the purpose of winding up its business. (b) At any time after the dissolution of a limited liability company and before the windi…

Right to Wind Up Limited Liability Company’s Business. (a) After dissolution, a member who has not wrongfully dissociated may participate in winding up a limited liability company’s business, but on application of any member, member’s legal representative, or transferee, the Comm…

Member’s or Manager’s Power and Liability as Agent After Dissolution. (a) A limited liability company is bound by a member’s or manager’s act after dissolution that: (1) Is appropriate for winding up the company’s business; or (2) Would have bound the company under section 4841 b…

Articles of Termination. (a) At any time after dissolution and winding up, a limited liability company may terminate its existence by filing with the Registrar of Corporations articles of termination stating: (1) The name of the company; (2) The date of the dissolution; and (3) T…

Distribution of Assets in Winding Up Limited Liability Company’s Business. (a) In winding up a limited liability company’s business, the assets of the company must be applied to discharge its obligations to creditors, including members who are creditors. Any surplus must be appli…

Known Claims Against Dissolved Limited Liability Company. (a) A dissolved limited liability company may dispose of the known claims against it by following the procedure described in this section. (b) A dissolved limited liability company shall notify its known claimants in writi…

Other Claims Against Dissolved Limited Liability Company. (a) A dissolved limited liability company may publish notice of its dissolution and request persons having claims against the company to present them in accordance with the notice. (b) The notice must: (1) Be published at …

Grounds for Administrative Dissolution. The Registrar of Corporations may commence a proceeding to dissolve a limited liability company administratively if the company does not: (1) Pay any fees, taxes, or penalties imposed by this Chapter or other law within 60 days after they a…