Kentucky General Assembly Corrects Typo in Business Corporation Act – Its Only Been There Since 1988

Kentucky General Assembly Corrects Typo in Business Corporation Act –

Its Only Been There Since 1988

 

The 2015 Kentucky General Assembly, in HB 440, corrected a typographical error that can be dated to 1988.  At that time, in the course of drafting the Kentucky Business Corporation Act, it being based upon the then existing version of the Model Business Corporation Act, a decision was made to define the aspirational standard of a director as including the more subjective “honestly” in place of the more objective “reasonably.”  However, even as this change was made with respect to the aspirational standard, a similar change was not made with respect to the standard for affording a director indemnification; that provision continued to utilize “reasonably.”  

 

In order to address this differential and provide for the intended consistency between the aspirational standard and the standard for indemnification, KRS § 271B.8-510 has been revised to delete “reasonably,” substituting in place thereof “honestly.”