Corporate Director and Shareholder Liability for Unlawful Distributions in Mississippi

At a glance

Requirements one by one

Director conduct and amount

Miss. Code § 79-4-8.33(a) requires a director’s vote or assent to a distribution beyond what § 79-4-6.40(a) or § 79-4-14.09(a) permits. The claimant must establish that, when acting, the director failed § 79-4-8.30. The amount owed to the corporation is the excess, not automatically the full payment. Section 79-4-8.30 requires good faith, a reasonable belief in corporate interests, and appropriate care when becoming informed for a decision.

Recovery from directors and recipients

Under § 79-4-8.33(b), a director held liable may seek contribution from other directors who could be liable and pro rata recoupment from a shareholder who accepted an unlawful amount knowing of the § 79-4-6.40(a) or § 79-4-14.09(a) violation. The recovery clause belongs to the liable director; subsection (a) makes the director liable to the corporation.

Filing periods

Section 79-4-8.33(c)(1) gives two years from the relevant § 79-4-6.40(e) or (g) measurement date, the date an articles restriction caused a § 79-4-6.40(a) violation, or the date a § 79-4-14.09(a) liquidation payment was made. Contribution or recoupment must be commenced within one year after the claimant’s liability is finally adjudicated under subsection (a).

What trips people up

Section 79-4-6.40(h) excludes liquidation distributions from the ordinary distribution rule. For a dissolved corporation, § 79-4-14.09(a) requires payment or reasonable provision for claims before shareholder asset distributions. Section 79-4-8.33 expressly reaches that distinct duty.

Common questions

Is recipient knowledge required?

Yes, for a liable director’s statutory recoupment claim. Section 79-4-8.33(b)(2) requires that the shareholder accepted the unlawful amount knowing it violated the cited distribution or dissolution rule.

Does authorization always start the filing clock?

No. Section 79-4-6.40(e) gives different measurement dates for share acquisitions, distributed indebtedness, and other payments. Section 79-4-8.33(c) also has separate starts for an articles restriction and a liquidation payment.

Statutes and sources

• Miss. Code § 79-4-6.40, accessed September 27, 2026: official final 2001 SB 2452 § 4 gives ordinary distribution authorization, limits, dates, and liquidation exception.
• Miss. Code § 79-4-8.30, accessed September 27, 2026: official final 1999 HB 829 § 1 revises the director standard.
• Miss. Code § 79-4-8.33, accessed September 27, 2026: official final 2001 SB 2452 § 11 adds dissolved-corporation distributions to the liability and filing rules.
• Miss. Code § 79-4-14.09, accessed September 27, 2026: official final 2001 SB 2452 § 19 states director duties after dissolution.