Corporate Director and Shareholder Liability for Unlawful Distributions in Missouri

At a glance

Requirements one by one

Knowing unlawful dividends and the debt measure

Mo. Rev. Stat. § 351.345 addresses directors who knowingly declare and pay a dividend outside §§ 351.210 and 351.220 or, for a liquidating dividend, outside the chapter's capital-reduction or dissolution provisions. Section 351.210 restricts paid-in-surplus distributions when accrued preferred dividends remain unpaid or net assets would fall below stated capital. Section 351.220 prohibits dividends when net assets are or would be below stated capital and recognizes restrictions in the articles. This page does not calculate surplus, net assets, or whether a payment was permissible.

Unlike an excess-payment-only formula, § 351.345 makes the responsible directors jointly and severally liable for corporate debts existing when the dividend is made and for later debts contracted while they remain in office. The statute caps each director's liability at the amount of the dividend. It does not state a separate interest formula.

Absence, objection, and reliance

Section 351.345 exempts a director who was absent when the dividend was made or who objected and filed the objection in writing with the corporate secretary. It also fully protects a director who relies in good faith on the corporation's books of account or official statements about assets, liabilities, earnings, surplus, and related facts.

What trips people up

The statutory trigger is a knowingly declared and paid dividend. Section 351.345 does not use the broad distribution language found in some other states' director-liability sections. Its own text gives no recipient-shareholder knowledge or repayment rule and no special filing clock; those questions require separate authority in a real dispute.

Common questions

Does the statute make every director liable for every later company debt?

No. Section 351.345 requires a knowingly impermissible dividend, measures later debts only while the respective director continues in office, and caps liability at the dividend amount. Its absence, objection, and good-faith reliance protections also matter.

Can a director preserve an objection orally at a meeting?

The express exemption in § 351.345 calls for an objection filed in writing with the secretary; the same sentence also exempts a director who was absent when the dividend was made.

Statutes and sources

• Mo. Rev. Stat. § 351.210, accessed September 27, 2026: paid-in-surplus dividend restrictions.
• Mo. Rev. Stat. § 351.220, accessed September 27, 2026: dividend authority, net-asset limit, and articles restrictions.
• Mo. Rev. Stat. § 351.345, accessed September 27, 2026: knowing-dividend liability, debt measure and cap, absence, written objection, and good-faith reliance.