Virginia § 13.1-692 - Liability for unlawful distributions
Full text of Virginia Code of Virginia § 13.1-692 — Liability for unlawful distributions, with citation guidance and answers to common questions.
§ 13.1-692. Liability for unlawful distributions
A. 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.
B. A director held liable for an unlawful distribution under subsection A is entitled to:
1. Contribution from every other director who could be held liable under subsection A for the unlawful distribution; and
2. Recoupment from the shareholders who received the unlawful distribution in proportion to the amounts of such unlawful distribution received by them respectively.
C. 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.
D. 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.
Code 1950, §§ 13-206, 13-207, 13.1-44; 1956, c. 428; 1985, c. 522; 2005, c. 765; 2019, c. 734.
Source: official Virginia text · Last verified 2026-08-27
Frequently Asked Questions About Virginia § 13.1-692
What does Code of Virginia § 13.1-692 cover?
Section 13.1-692 ("Liability for unlawful distributions") is part of the Code of Virginia, the codified statutory law of Virginia. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Virginia § 13.1-692?
A common citation format is "Code of Virginia § 13.1-692" (Virginia). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Virginia law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Virginia official source linked on this page or consult a licensed Virginia attorney.
How does Virginia § 13.1-692 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Virginia can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Virginia.